Course of Construction is the other reference name for Builders risk insurance coverage and it is a type of property coverage. It is a type that protects the building from any sort of risks when the construction is on-going. It can cover not just the structure, but also materials that are kept on site ready to be installed or materials that are to be transported to the construction site is also covered against any form of risk. It will pay for damages up to the boundary covered. Boundary generally reflects the total constructed value, which includes labor and material costs, but excludes the value of land. The limit is also determined based on the construction budget fixed by the builder.
Builders risk insurance coverage is generally written in terms of months ranging from three to twelve months. However, if the project is not completed up to the end term of the policy, it can be extended. This extension will be offered only once. So, what are the risks covered under this policy? Damage caused to the so far completed structure from any sources like vandalism, blast, storm, lightning, robbery, wind, fire and damages caused due to vehicles like aircraft. Some of the items that are normally excluded from the list of risks are mechanical breakdown, intentional parting, governmental actions, war, damage due to water, damage caused due to robbery by the employees working on the construction project and earthquake. However, based on the area in which the site is located, flood and earthquake damages can also be covered on request. In most of the cases, damage caused due to inappropriate design, materials and workmanship are excluded.
Generally, insurance for builders have some common rules like sub-contractors should have their own insurance and they cannot be protected by the policy taken by the actual builder/contractor. It will not protect property of others and there will not be any protection for apparatus used on the site. There will also be no protection against liability and accidents on the job site are also excluded. The builder should keep in mind that the coverage will end as soon the construction is completed even if the term of the policy has not reached.
When shopping for insurance for builders, people engaged in real estate construction should be careful about the selection of a good insurance company. Also, they should clearly read the terms and conditions before actually purchasing a policy.
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