Builder’s Risk Insurance

Builder’s Risk insurance, also known as “course of construction” is a specialized form of insurance designed to insure buildings or projects against repair or replacement costs while they are under construction. The standard Commercial property insurance policies are not designed to cover buildings in the course of construction, which is why Builder’s Risk Policies are necessary.

This insurance will usually also cover build materials, fixtures and appliances all of which are intended to become an integral part of the structure under construction.

PROPERTY INSURED: This form, except as provided, insures:

(a) Property in the course of construction, installation, reconstruction or repair
(i) owned by the Insured;
(ii) owned by others, provided that the value of such property is included in the amount insured; all to enter into and form part of the completed project including expendable materials and supplies not otherwise excluded, necessary to complete the project described in the Declarations for this form as “Description of project”.
(b) temporary buildings, scaffolding, false work, forms, hoardings, excavation, site preparation, landscaping and similar work, provided that the value thereof is included in the amount insured and then only to the extent that replacement or restoration is made necessary to complete the project;
(c) expenses incurred in the removal from the construction site of debris of the property insured, occasioned by loss, destruction or damage to such property and in respect of which insurance is provided by this Form.

For any items not listed above, it is usually possible to add coverage through endorsements or by obtaining additional policies.

“All Risk” policies cover all risks unless they fall outside of the meaning of “occurrence” in the insuring agreements or are otherwise removed from coverage by the exclusions. Examples of typical risks covered by a Builder’s Risk policy include:

Fire
Lightning
Explosion
Impact by aircraft or vehicles
Riot, vandalism and malicious acts
Windstorm, hail and rain
Burglary and theft
Collapse
Subsidence

When Does Coverage Cease?

Builders Risk policies will not respond to a loss after:

The building becomes occupied or is put to its intended use
The building has been left unattended, or has no construction activity

This is important information as buildings that meet the above conditions need to be insured under a different type of policy.

How much to Insure under Builders Risk Policy?

The amount of insurance should adequately cover the full value of the project in its finished state. If any change orders alter the completed value during construction the Builders Risk policy should be adjusted immediately.

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Our mission is to anticipate and provide the best product at the best price to meet the insurance requirements of our clients. We provide a wide variety of insurance packages, for both personal insurance and commercial insurance needs. Peake & McInnis Ltd. has been providing Islanders with the most current and comprehensive insurance policies, packages and rates on Prince Edward Island since 1912. We have the experience and perspective to provide an insurance solution for the novice or experienced buyer. Our competent and proficient staff are prepared to answer your questions and concerns with a sincere and personal approach.

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