Builders risk insurance provides financial protection for building projects while they are under construction or renovation. Coverage includes fire, theft, vandalism and extreme weather. The cost of builders risk insurance typically averages between one and four percent of the total construction costs and varies based on several factors, including type of project, location, and construction type.
The term “builder” in builders risk insurance refers to the insured, who can be the contractors and subcontractors performing the work, the owner of the property, the lender, and others with insurable interests. The builders risk insurance policy is generally purchased by the property owner or contractor. All covered parties in the policy should be listed as named insureds.
Builders risk insurance protects the builder’s insurable interest during the course of construction or renovation of a building or structure.
Coverage for builders insurance can include materials, fixtures, equipment, and the structure itself in the event those items are damaged or destroyed by a covered risk, such as fire, theft, vandalism or extreme weather.
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