Building in Daphne, AL

Builder’s Risk – Construction Insurance

While building a new home, there are many risks that a new construction will face.  When a house is in its beginning stages, it is much more vulnerable to undertake damage.  If you want to make sure that your construction is successful, you’ll need insurance for your project.


Who Buys Builder’s Risk Insurance?

Property owners, general contractors, or custom builders.  If you’ve been loaned money from a mortgage company to build a new house, they will likely require that you get builder’s risk insurance.  One way or another, it just makes sense to provide protection for your construction and the materials that you will use on the building.

Builder’s Risk policies pay for damage up to the covered limit.  That limit must match the total value of the house in its completed form, not including the value of the land.  Policies can be written in terms of 3 months, 6 months, or 12 months.  If the project isn’t completed in the amount of time that was chosen for it to be completed in, the term can be extended.


What’s Covered?

Builder’s Risk covers fire, lightning, explosion, vehicles/aircraft, theft, vandalism, hail, and wind (but wind may be limited near the coast).


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