Table of Contents
what is builders risk insurance for homeowner hey there welcome back to the risk well answers video where we take real questions from our clients and stakeholders and answer them here on our YouTube channel and our website in this video the subject is what is not covered by the Builder’s risk policy here at risk while we do a lot of work with Real Estate
What is builders risk insurance for homeowner Investors with real estate developers with Builders with flippers and rehabbers Builders risk policy is maybe one of the most common things that we do at risk wealth one of the questions that comes up again and again and again is what is covered and what is not covered on the Builder’s risk policy so
we’re going to get into three things in this video that are not covered in the Builder’s risk policy they’re covered elsewhere we have to structure your insurance program and make sure that it is customized for exactly what your needs are so you get everything you need and nothing you don’t need let’s get into the details right after this foreign []
General Liability Exposures
What is builders risk insurance for homeowner so there’s three things we’re covering in this video that are not included in the Builder’s risk policy the first thing that’s not covered in the builders Risk insurance policy is general liability kind of exposures general liability is a casualty insurance policy when you hear the word of casualty I want you to think third party it is financial liability to another party an outside party Builders Risk insurance is all about first party coverages it’s you your asset your equipment your schedule of whatever
it happens to be tools and installation materials things that are about to be installed in your property that’s something we’ll get into here in just a little bit but for general liability exposures you want to have a casualty policy that pairs with the Builder’s risk policy now some Builders risk policies most of them are written on a one-off basis sometimes referred to as a hot shot basis
where the policy is designed to be written for a given period of time the work is performed and completed and the policy has no reason to exist anymore by contrast general liability policies are designed to be written on an ongoing annual basis they’re not Project Specific typically speaking and they are all encompassing across every job that is being performed for a given policy term which is usually one year Builders risk policy can be as short as three months a lot of times you’ll see
what is builders risk insurance for homeowner it written on an annual basis with a prorated refund policy so if your job gets done in four or five months then you have a prorated refund not the case with general liability so if you are running a rehab or flipping operation if you’re a builder if you’re a real estate developer you’re going to want to get a standalone general liability policy and also most likely a commercial liability umbrella sometimes referred to as excess liability but that’s going to cover all of your construction related operations as well as bodily injury and property damage which is outside of the scope of the Builder’s risk policy
Business Property and what is builders risk insurance for homeowner
what is builders risk insurance for homeowner the second thing that is not covered on the Builder’s risk policy is business property as well as contents so if you have stuff in the house if you have furniture if you have uninstalled building materials there’s a lot of things that are not covered all in a builder’s risk policy in regards to property personal property business property whatever
it happens to be it’s typically not covered on a builder’s risk policy that’s designed to be covered on a commercial property policy or homeowners if it is a residential owner occupied kind of property doesn’t really happen at risk well very often especially after we’ve sold our
Holmen auto book of business earlier in 2023 but contents and business property need to be addressed elsewhere if you have uninstalled building materials that are on premises where you’re in the middle of a job and you just haven’t installed this stuff but you’re keeping cabinets or flooring or drywall sheetrock whatever happens to be maybe in a locked garage or something you need to make sure that the policy allows for
what is builders risk insurance for homeowner it because you may be better off depending on the scale of your operation and what all you’re into maybe better off with an installation floater that is specifically designed and underwritten and priced for all the jobs that you have going on this one and the one across town and whatever is going on for your exposure wherever you have property wherever you have assets that are on the premises somewhere you want to make sure that you are taking into account what the Builder’s risk policy
what is builders risk insurance for homeowner that your agent has placed with you covers and doesn’t cover for risk well most of the ground up construction that we do is placed either with Liberty Mutual or with chub but on the retail excuse me the rehab and renovation we have any number of places where we might place the coverage based on the unique characteristics of the risk that you bring us so we’ll have that conversation when we tell you what’s covered and what’s not covered but generally speaking business property and contents probably not going to be covered
Accidents and Injuries to Workers
what is builders risk insurance for homeowner and the third and final thing in this video that is not covered on the Builder’s Risk insurance policy is accidents and injuries to employees or to subcontractors why is that because all those exposures are intended designed to be covered on the workers compensation insurance policy it’s not supposed to get picked up on the Builder’s risk policy because in the state of Texas
where risk well is domiciled and in virtually every state across the land the workers compensation policy has what are called statutory limits where they’re designed to be the quote unquote Sole and exclusive remedy for 3 three things on the job accidents injuries and diseases to your Workforce both W-2 employees and in most cases 1099 subcontractors that do more than 50 percent of their total work with your company
so if you have a set of regular subs that are doing regular work for you definitely want to have a conversation of a Workers Compensation Insurance because it’s one not covered on Builders what is builders risk insurance for homeowner never ever covered on Builders Risk insurance every company I’ve ever heard of has a hard and fast exclusion on that kind of coverage being offered on a builder’s risk policy but more importantly
what is builders risk insurance for homeowner if you have employees if you have regular subcontractors you want to make sure that you’re covering your exposure in preparing a safe work environment because you probably have a regulatory obligation to make a plan for that and if you’re not doing
Workers Compensation Insurance then you have to be either ready to pay for it out of pocket or have some kind of provision for for when you inevitably get sued because something happens on a premises and there’s an accident or an injury to one of your workers or subcontractors in the adult have a work comp policy in place because the Builder’s risk policy is definitely not going to cover it