Protect Your Business With Builders Risk Insurance Texas
If your business is in construction whether you are a property owner or a contractor or a developer, for as long as you are involved in building a structure whether a home or a commercial space, you certainly need to have a builder’s risk insurance so you can be protected from experiencing some losses in case some unfortunate situation occurs while your property is under construction.
If your property is in Texas, and you have a construction project going on, it is only best to get yourself a builders risk insurance so that you can get the most appropriate coverage and risk policies for your property. But what is a builders risk insurance really is all about? What is the coverage for this kind of insurance? How much does this insurance policy cost an insurance holder?
What is a Builders Risk Policy?
A builder risk insurance is a kind of risk policy that is particularly created to offer protection to a property owner or a contractor while their structure is in the process of construction. A builder’s risk insurance may be used for both already existing property that is currently under renovation or for a structure that is presently being built. This type of risk insurance intends to provide protection in the event that some damage occurs at the job site such as theft, vandalism, hail, fire, lightning, etc.
A builders risk policy can be obtained for various construction projects and properties that include housing construction both multiple housing projects and single-family homes, commercial real estate, residential renovations, new residential projects, and the like. An insurance builders risk is a unique kind of insurance property, and apart from the owners or the contractors, all parties who have some type of property involved such as time, materials, supplies etc. that are being used in the construction must also be insured and must have their own policy coverage so they too can be protected. Some of them may be subcontractors or even the bank if there is a loan involved in the project.
Builders risk insurance is also called a course of construction.
How is Builders Risk Insurance Calculated?
If you are a contractor or an owner in Texas, you may consider purchasing a building risk insurance which are available in short periods such as 3 months, 6 months, and 12 months. However, if you have not yet completed your project after the policy coverage ends, you may be allowed to extend your builders risk insurance policy for at least once.
The cost of a builders risk policy varies but it usually ranges between 1% and 4% of the total expense of the build and will also depend on the type of exclusions as well as the coverage that you will choose as part of your risk policies. To have an idea about the maximum amount that you can allot for the insurance, you may base it on your build budget.
An insurance builders risk is calculated based on several different factors such as the total cost of the materials used, cost of labor, and the value of the property. Calculating for the risk insurance builders though does not include the value of the land, and the average cost for this kind of insurance policy is around $95 monthly or $1,140 for an entire year. These prices refer to the small business owners, though many of them do not go over $1,000 a year. But then again, the amount of a builder’s risk insurance vary depending on the project.
Projects that make use of costly materials and have high costs of labor also means having an insurance that has a bigger coverage limit to ensure that the policy holder also gets the most protection. For high end projects in Texas, coverage limits can go as high as multi million dollars or approximately $460,000 without any deductible. A builders risk insurance in Texas can certainly be very expensive, but insurance companies also have a way to help you save some money and this can be through a master policy. This kind of insurance offers coverage that do not have any expiration date and is perfect for contractors who have a continuous line of projects.
Computing for a builder’s risk insurance also needs to consider some other factors like the location, the term of the coverage, the amount of premium, and the kind of construction. To have a lower premium to pay each month means having a higher deductible.
What Comprises a Builder’s Risk Insurance Coverage?
Though this kind of insurance has a wide scope of coverage, this does not include general liability. Its coverage also do not include landslides, earthquake, flood, acts of war, injuries and accidents that happen in the workplace, other kinds of water damage, government action like discontinuing the build because of code violations, and also breaches of contracts.
As a contractor or an owner, you can definitely add more to your coverage if you are willing to pay the price. Some of these extensions can include protection from water damage from the drains and sewers, materials or property in transit, scaffolding, temporary structures in your reported location, property that is in temporary storage, fire department service charge, debris removal, and even protection for some very important documents such as blueprints, site plans, and the like. You may even add a general liability to your coverage to increase your safety net.
There is no limit to what your insurance can cover as they can always be added as supplements for as long as you are willing to pay for those extra fees. Some even consider getting what they call a “soft cost” which is about getting protection from the risk of financial losses in case the project gets delayed. These costs may be incurred from extra storage fees, an increase in labor costs, equipment rentals, the extra expenses of keeping the workers in the work site, etc.
Whether your build is in Fort Worth or whatever location, make sure to get this kind of protection because though it may look expensive and may seem like an additional cost, for now, you will appreciate it when an unforeseen circumstance happens. After all, no one can guarantee any type of safety most especially during the process of building as there are so many elements and hazards that are always present in the worksite. What you can be sure of is that you can control the type of protection that you can have for your asset and your business. To get the best, talk to an agent that you can trust.
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