Builders' Risk Insurance in Georgia- What Is It? And How Do You Make Sure You Have The Right Coverage Without Overpaying?

Builders' Risk - Also Known As Construction Insurance

Builders' Risk Insurance is an insurance policy that covers a builder or contractor's property, construction materials, and equipment while a project or building is under construction. 

In today's world, legislation has been passed in most states that require builders or contractors to purchase a builders risk policy, especially when it relates to commercial construction and new home developments. 

So How Does Builders' Risk Differ From Commercial Property Insurance?

The big difference between a Builders' Risk policy and a Commercial Property policy is that a Builders' Risk policy is tailored to a specific job or project and will cover the property and materials from the beginning stages of the project all the way to the project completion. 

A standard Commercial Property policy WILL NOT cover the risk specific to building or renovating, which is why you need a Builders' Risk policy. 

This includes things like damage to the construction site due to weather events or vandalism. For instance, if your company is constructing a building and half way through the construction, a tornado wipes out the building entirely, a Builder's Risk policy is THE ONLY policy that is going to pay for the loss and reconstruction. A Commercial Property policy WILL NOT cover that. 

How Much Should You Be Paying For Builder's Risk Insurance In Georgia?

This is a difficult question because there are many factors that play a role in the rate and pricing. The cost of the policy are generally going to be 1-2% of the total construction budget but can sometimes be less depending on what kind of carrier access your broker has. Some of the other factors include:

• Location
• Type of construction
• Length of construction
• Estimated project costs
• Safety monitoring on site
• Experience and history of builder/contractor
• Materials used in construction
• Estimated time frame of project completion
• Whether it is a new construction or renovation project
• Number of employees on the job site

Builders' Risk Coverage Specifics

1. Permanent and temporary buildings on the job site- whether damage is from weather, an unforeseen accident, or vandalism, your policy should cover these damages without having to pay a deductible.
2. Building materials- Since it is impossible to lock up materials during the early stages of construction, your materials are vulnerable to thieves. The Builder's Risk policy will pay to replace these materials if they are stolen or is there is another cause of loss during the project.
3. Accidents related to property transported to and from the job site
4. Excavation and catastrophic incidents
5. Loss of income

Who Pays For The Builders' Risk Policy?

1. General Contractors or Subcontractors
2. Property Owners

Types of Builders' Risk Policies

1. Property
2. Liability

You need to have a combination of property and liability coverage with your Builders' Risk policy so that you are covered under any circumstance. 

Things to Know Before You Purchase A Builders' Risk Policy​

• Liability Coverage- Either you are a property owner or constructor, you need to have separate liability coverage for workers’ accidents and property damage. That coverage can compensate for any lost wages and medical expenses of the construction workers. It could also pay for any damage incurred by your construction site to neighboring properties or automobiles.
• Equipment Malfunction- Your builders’ risk policy should include a condition about the expensive equipment you place on your construction site. In case of a covered adverse event, equipment should be well-documented, and the insurance company should pay all the invoices concerning its purchase and installation.
• Existing Structures Coverage- Many construction projects are about remodeling existing buildings, adding more roofs on them, or even building another structure to the same land a pre-existing building is already there. That is why your policy has to include damages to the newly built construction project and the older ones.
• Listing of All  Stakeholders- Most builders’ risk policies mention the property owner, the constructor, and the bank as the sole stakeholders having insurance claim rights in case of an adverse event. However, you can ask your broker for other subcontractors and material suppliers to appear on the policy contract to have lawful grounds for compensation.

Builders' Risk policies are not your typical "standard" commercial insurance policies. Every project is unique and your Builders' Risk policy needs to be tailored to fit your project's needs. 

This is where The Roberts Insurance Group can help. 

We specialize in working with contractors and construction projects all around Georgia and can make sure your project is getting the very best coverage for the very best price. 

Give us a call at 678-250-8133 to see how we can help with your Builders' Risk policy!

The Roberts Insurance Group is a Georgia Insurance Broker specializing in commercial and personal insurance for our clients throughout the state of Georgia. We help our clients lower their cost of insurance with our superior claim and risk management expertise and our extensive carrier access. We are in the business of building relationships with our clients to help them grow and succeed. Contact us today to see what we can do for your family or business.

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