If you have a commercial property under construction, you need to consider liability and property risks. Your current insurance policies may not cover your building while it is still under construction, which is why you may require commercial builders risk insurance.
What Is Commercial Builder’s Risk Insurance?
This type of insurance covers your property while it is still under construction. It will generally cover most of the basic risks. For instance, it can protect against theft, vandalism and natural disasters, During construction, your building may be more vulnerable to the elements and thieves. The higher value of the building, the more likely you are to need coverage.
Who Requires Commercial Builder’s Risk Insurance?
While many property owners cover their risk with commercial builder’s insurance, multiple entities may benefit from coverage. Anyone who has any financial interest in the project may need builder’s risk insurance. Sometimes, lenders will require a property owner to carry insurance and then the property owner can name contractors as insureds. Those who may need a policy include:
- Real estate developers
- House flippers
- School Districts
If you want to protect your stake in a commercial build, you should carry insurance.
Builder’s risk insurance protects parties against damages such as theft, natural disasters, defects and more. Without it, the financial loss could be devastating.