Builders Risk & Installation Floaters – The Basics

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UPDATED: July 22, 2016

Builders Risk insurance is coverage for… you guessed it… property and materials when a structure is being built. Whether it be for a single family residence, multi-family residence, or commercial building having a policy in place during construction is essential. Sadly, while properties are being built, they sometimes are at an even higher risk for such perils such as wind, flood, and fire. Damage can also arise from design errors or faulty workmanship.

Many experts suggest that the property owner should be responsible for obtaining the Builders Risk insurance policy, especially if an issue between the owner and the contractor arises. By having the owner purchase the policy, the owner receives the monetary compensation immediately and is in a better position to rectify any damages. However, many contractors have ongoing contracts with insurance companies and can obtain significant reduction in policy premiums.

A typical Builder’s Risk policy will cover the following:

  • Fixtures
  • Materials
  • Machinery
  • Equipment
  • Other physical property purchased for the construction

Builders Risk policies do not typically cover the following:

  • Personal injuries
  • Flood
  • Earthquake
  • Wind in beach zones

Builders Risk coverage normally remains in effect until the entire construction process is completed, at which time the project owner’s permanent property policy should become effective.

Installation floaters, often written in conjunction with builders risk policies, are generally associated with plumbing, heating, cooling and electrical systems, but can insure any property being installed. Carpeting, tile, glass window frames, elevators and machinery are examples of property that can be covered.

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