Builders Risk Insurance Colorado (Cost and Coverage)

Builders Risk Insurance Colorado: Cost and Coverage

Builders Risk Insurance Colorado covers buildings undergoing construction or renovation. This helps protect owners and contractors from losses due to fire or other things during construction.

It is important to understand the cost and coverage of this insurance policy for the people who are involved in construction projects. This article helps you to understand the cost and coverage of Colorado Builders Risk Insurance:

What is builder's risk insurance?

This can also be called a Course of Construction Insurance. It is an Insurance policy that covers materials excluded from general liability policies including equipment and tools. Also, it is a type of construction insurance since it covers damage to the portion of the project that is already completed while the construction project is in progress.

Several small businesses and independent contractors look for bundle packages for general liability, builders' risk, and workers' compensation insurance for enough coverage.

Builders' risk insurance is not required by the law. However, some clients won't allow you to initiate the construction project if you do not have an insurance policy. With builder's risk insurance, you can show your clients that you are committed to taking care of their property during construction.

Also, it shows that you are holding yourself accountable for any losses that might happen during construction.

Builders Risk Insurance Cost

Usually, Builders Risk Insurance cost is calculated based on five main factors:

• Location

The major factor that decides the cost of a builder's risk insurance is the location of a construction project. The features of location that could impact Builders Risk Insurance cost include closeness to fire stations, flood zones, and wildfire states. Also, these include coastal areas and wind or hail-prone areas. 

• Type of Project

Generally, the course of construction projects is characterized as new construction, remodeling, and installation. The cost to cover installation is usually low costly. This is because these projects are shorter and less involved. In contrast, remodeling projects will have higher risk costs for builders. This is because an existing structure comes with risk, especially when the project involves structural changes.

• Type of Construction

The building materials used in the construction also affect the cost of insurance. Higher-quality construction ensures a more durable structure and is less prone to risk. For instance, projects constructed with fire-resistive materials are more favored than wood frame structures. This is because it can easily result in a complete loss in the event of a fire. 

• Optional Coverages

The type of the value of the optional coverage you choose can affect the cost of a Builders Risk Insurance Policy. Those optional coverages include flood damage, earthquakes, contract change orders, and more.

Builders Risk Insurance Coverage

Many Builders Risk Insurance Colorado providers cover direct effects like damaged construction materials and indirect effects. This includes Loss of revenue caused by property-related damage during construction.

The following are some examples of risks which Builders Insurance Policies can cover:

• Materials

Construction materials that are damaged or lost during transportation, documents, and data like blueprints or project plans. These also include temporary structures like scaffolding, fencing, signage, and retaining walls.

• Damages

Damages to the job site are caused by destruction, fire, lightning, hail, high winds, and natural acts like hurricanes or earthquakes.

• Complete General Liability

Claims for non-employees of physical injuries during the construction work.

• Equipment

The cost required for replacing or fixing the construction equipment.

• Projects

Remodels, home additions, new construction, and installation on residential as well as commercial properties.

• Financial Loss Due to Construction Delays

Real estate taxes, sales income, rental income, and more paid interest on loans.

Comparing Builders Risk Insurance and General Liability Insurance

General liability insurance for building contractors would not cover the contractor’s property. For this, you need a builder’s risk insurance policy. 

General liability insurance provides coverage if you are responsible for causing any injury or property damage to someone. This also pays related legal fees.

Below is how the type of coverage differs between builders' risk insurance and general liability insurance.

To Summarize

Ultimately, Builders Risk Insurance offers essential coverage needed for construction projects. This protects from various dangers which can occur during the course of a project. By understanding the costs and coverage, contractors and property owners can make the right decisions and protect their investments.