Builders Risk Insurance Texas

Builders Risk Insurance Texas: The Ultimate Guide

Whether you are a property owner, a contractor, or a developer, you certainly need to have builders risk insurance so you can be protected from experiencing losses in case some unfortunate situation occurs.

If your property is in Texas and you have a construction project, getting yourself builders risk insurance is best.

But which coverage is right for you? What is builders risk insurance in Texas all about? How much does this insurance policy cost an insurance holder?

Here’s everything you need to know.

What is Builders Risk Insurance in Texas?

builders risk insurance texas

Texas builders risk insurance is a kind of risk policy that is created to offer protection to a property owner or a contractor while their structure is in construction. Builders risk insurance is also called course of construction insurance.

Builders risk insurance TX may be used for already existing property under renovation or a structure being built. This type of risk insurance intends to protect if damage occurs at the job site, such as theft, vandalism, hail, fire, lightning, etc.

A builders risk policy can be obtained for various projects and properties that include housing construction, multiple housing projects and single-family homes, commercial real estate, residential renovations, new residential projects, and the like.

Apart from the owners or contractors, all involved parties in the construction must also be insured and have their own policy coverage so they can be protected. Some may be subcontractors or even the bank if a loan is involved.

Who Needs Texas Builders Risk Insurance?

Anyone involved in building construction in Texas is required by law to carry builders insurance. Additionally, subcontractors and their employees working on the site also need the policy.

Why Do I Need Builders Risk Insurance in Texas?

Builders risk insurance policy in Texas covers the health and safety of those working on site. This insurance is especially useful as it protects against property damage and injuries and ensures that those who manage the construction site follow the correct building regulations and procedures.

Furthermore, the policy covers the costs of unforeseen damages, which are increased due to inflation and the costs of repairing and rebuilding a home.

How Much Does Builders Risk Insurance in Texas Cost?

Typically, the cost of builders risk insurance in Texas can be as low as $37 per month.

If you are a contractor or an owner in Texas, you may consider purchasing building risk insurance for 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 at least once.

The cost of a builders risk policy varies, but it usually ranges between 1% and 3% of the total expense of the build, and it depends on several factors, such as:

  • The type of coverage you choose
  • The type of the policy exclusions
  • The total cost of the materials used
  • The cost of labor
  • The value of the property
  • Location
  • The term of the coverage
  • The amount of premium
  • The type of construction

But again, the amount of a builder’s risk insurance varies depending on the project. Projects that use costly materials and have high labor costs also mean having insurance with a bigger coverage limit to ensure that the policyholder also gets the most protection. Builders risk insurance in Texas can be very expensive, but insurance companies also have a way to help you save some money, which can be through a master policy.

One of the best ways to get a lower policy is to talk to an experienced insurance specialist so you can get a builders risk insurance quote to fit your business. East Insurance Group offers insurance in Austin, Houston, San Antonio, Dallas, Frisco, and other cities in Texas.

Is Builders Risk Insurance Required in Texas?

Builders risk insurance in Texas covers your property in case of natural or artificial damage. Texas requires either a project owner or a contractor to purchase insurance to protect in case the property gets damaged during construction.

Read more: The Ultimate Guide to Contractor Insurance in Austin, Texas

What Builders Risk Insurance in Texas Covers

  • Buildings: The policy covers buildings and structures at the premises, including foundations, fixtures, machinery, equipment, and supplies used for construction.
  • Profits: Builders risk insurance in Texas also covers profits, meaning contractors can be reimbursed for the pro-rata percentage of profit earned after the date of the loss.
  • Equipment Breakdown: Insurance covers damage to covered property caused by mechanical breakdowns.
  • Electronic Data: Texas builders risk insurance covers research and replacement of important documents and electronic data lost in a covered risk.
  • Testing: In case of a physical loss caused by electrical, mechanical, or hydrostatic testing, builders risk insurance in Texas can provide coverage.

What Builders Risk Insurance in Texas Doesn’t Cover

Builders risk insurance in Texas has a few exclusions, such as:

  • The land beneath the building
  • The water on the premises
  • The water on the premises
  • Specific property located outside buildings, such as trees, plants, and lawns
  • Earthquakes
  • Floods.

Who Typically Pays for Builders Risk Insurance?

Usually, builders risk insurance is the responsibility of the owner or the general contractor.

Does a Builders Risk Policy Cover Liability?

Builders risk policies typically don’t cover liability for accidents and injuries in the workplace. You can, however, purchase a separate liability policy as an addition to the course of construction coverage.

How Long Does the Insurance Last?

Builders risk insurance usually lasts from 3 months to 1 year. If there are no claims, the policy can be easily renewed.

What Triggers Builders Risk Coverage?

Generally, builders risk insurance covers the property on construction sites in case it gets destroyed by fire, wind, vandalism, and even collisions. In some cases, a builders risk insurance policy can cover construction materials stored off-site and cleanup costs.

Still confused about builders risk insurance in Texas, or do you need some help getting a quote for your business? Contact us today and get all the information you need fast and for free!