What Does Builders Risk Insurance Cover?

Builders Risk Insurance

A type of construction insurance, known as builders risk, covers materials, equipment and property related to building projects. It protects both new structures and renovations. However, does a builders risk policy cover liability?

Builders Risk

This type of coverage safeguards construction sites from loss and damage during a project, but it does not typically include liability for workplace accidents and injuries.

What Does It Cover?

Builder’s risk insurance protections include damage from the following events:

  • Vandalism
  • Lightning
  • Hail
  • Fire
  • Theft

Each plan differs, but they typically cover external events. Most policies do not include tools, liability, bodily injury, workplace accidents or property that belongs to someone else.

What Does It Exclude?

  • Employee theft
  • Mechanical breakdowns
  • Faulty design or quality
  • Contractual penalties
  • Earthquakes or floods

General Liability

A general liability policy is essential to anyone in the construction industry and mitigates exposures like bodily injuries, property damage and accidents. Lawsuits are expensive and time-consuming. This policy type helps reduce some of the costs associated with liability issues.

The law often requires a construction company to have this kind of insurance. It ensures coverage when someone sues for property damage, bodily injury or advertising slander.

It is vital to understand how each of these policies works. Liability policies focus on protecting the general contractor, and builders risk minimizes risk on the job site. For the best coverage without gaps, consult your insurance agent.