Builders Risk Insurance (also known as Course of Construction Insurance) is a type of property insurance that is required when starting a construction project. Whether it’s a renovation on a home, or a ground up build for a new Condominium project a builders risk policy is needed to cover any losses related to the project for physical damage. Types of claims that are covered are those cause by perils such as fire, theft and water damage. This policy is put into effect once construction begins and is kept in place until the property is ready for its intended use or occupancy.
It provides coverage up to the policy limit which is determined by the total value of the completed project, including all materials and labor costs. The construction budget is the most accurate and preferred document to determine policy limits and is composed of hard costs (labour, material and equipment) and soft costs (finance, additional interest, leasing and marketing, legal and accounting and other carrying costs).
Builders Risk Insurance covers anyone who has an insurable interest in the project such as the property owner, general contractor, construction manager and sub-trades.
