Builders Risk Insurance in Massachusetts

What is Builders Risk Insurance?

Construction projects regularly face challenges that contractors must address. While some challenges may be minor and easily taken care of, others can turn into major problems that lead to delays, increased costs, upset clients and, in some cases, severe financial hardships for contractors. Certain problems might even force companies into bankruptcy if there’s no protection against these challenges in place. Builders risk insurance helps contractors in Massachusetts prepare for and protect against certain covered challenges that can arise during construction projects.

Builders risk insurance is a highly specialized form of commercial insurance that’s designed for contractors and construction companies. These businesses might purchase a policy as a stand-alone coverage or as part of a multi-coverage commercial insurance policy. Many contractors insurance policies make the coverage available, and commercial package policies might also offer it.

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Who in Massachusetts Needs Builders Risk Coverage?

Most contractors who construct structures from scratch or perform major remodels should consider getting a builders risk policy.

Companies working on financed projects usually are required by the lender’s terms to carry coverage. Contractors who are in this situation normally have to purchase a policy that affords at least a minimum amount of coverage.

Companies that aren’t working on financed projects might not technically be required to carry coverage, but having a policy in place is normally still a good idea. Few contractors in Massachusetts can afford to have a major project go awry without any protection in place.

Builders Risk Insurance Massachusetts

Will Builders Risk Policies Cover Single-Family Home Construction?

Many insurance companies offer builders risk policies that cover new construction of single-family homes. Coverage for single-family home remodeling projects is less widely offered. Sometimes whether insurers will cover a remodeling project depends on how much value the remodeling project adds to the home.

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What Items Do Builders Risk Policies Cover?

While the exact items that a specific policy covers will be determined by that policy’s terms and conditions, most builders risk policies provide solid coverage for items that are on a work site. Generally speaking, policies provide robust protection for everything that is part of a construction project and located on the project site. Depending on a policy’s terms and conditions, this may include everything from supplies and expensive equipment to safety gear and portable toilets.

Often, builders risk policies will also cover certain labor costs associated with work that’s already been completed. For help understanding how a specific policy covers labor costs, contractors should speak with an insurance agent who specializes in this type of coverage. A knowledgeable agent will know what sorts of protections for labor costs are available and how a particular policy’s protections compare to those offered by other policies.

Builders Risk Insurance Massachusetts

What Perils Do Builders Risk Policies Protect Against?

The perils that a specific builders risk policy protects against are also determined by the policy’s own terms and conditions. There are, however, three main categories that most policies can be grouped into based on how many perils they cover.

First, basic form policies tend to be named perils policies that protected against listed risks. Most policies list wind, lightning, fire, explosions and several other items as covered risks.

Second, broad form policies are normally named perils policies that have longer lists of covered risks. To basic form’s coverage, these policies might add protection against some water damage (often not including flooding), falling objects and a few other items.

Third, special form policies are typically open perils policies rather than named perils ones. Open perils policies generally cover any risks that aren’t listed as exclusions. Excluded risks might include war, earthquakes and some other events.

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How Can Massachusetts Contractors Get Builders Risk Insurance?

If you need builders risk insurance for a project that your company is undertaking, contract the independent insurance agents at Scotti Insurance Agency. Our agents have helped insure many construction projects in Massachusetts, and they have the expertise necessary to help you find the coverage your company’s project requires.

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