Your reputation as a construction company relies on consistently delivering projects that are completed according to contractual agreements as well as safe for use. Owners partner with contractors like you, expecting that you have the insurance protection to cover projects from the initial groundbreaking all the way to completion. A lawsuit or claim made against you for a job that is under construction can put your business at risk. A builders risk insurance policy is your first step to protecting against risk for projects that are underway.
Covering Your Risk
As a contractor, you understand that you are liable and responsible for risks associated with an incomplete job. Contractually, owners aren’t responsible for these jobs until they have been completed, inspected and approved as per a contract. Open jobs are subject to several risks that can result in major damages or losses:
- Fire and/or explosion
- Certain weather events such as hail or lighting strikes
- Collisions with vehicles, including aircraft
- Theft and vandalism
Other risks can include company-owned equipment and activities associated with a job such as site cleanup, scaffolding and machine operation. Contractor work varies significantly in terms of hazards and exposures, so it’s necessary to have a policy that specifically addresses your operational risks.
Understanding Builders Risk
A builders’ risk policy should not be confused with general liability or workers’ compensation protection. The former refers to bodily injuries and certain types of damage associated with third parties. The latter is specific to the injuries of employees while on the job.