Builder’s risk insurance is a kind of property insurance that helps protect buildings that are still under construction. This type of policy often covers fire, explosions, lightning, hail, theft, and vandalism.
As an insurance agent, providing your clients with the information they need to fully protect themselves, and their project is key to establishing trust and value. You must be aware of the additional features of Builder’s Risk Insurance so you can guide your clients toward purchasing the proper coverage.
There are several Builder’s Risk Insurance NY features that your clients will certainly need, and we have listed the top ones below:
Expediting Expense
Sudden delays in a construction project due to theft or damage can cause significant financial setbacks, resulting in additional costs to complete the project on time. The expediting expense coverage reimburses your clients for costs incurred due to an unexpected delay that is beyond their control.
With this additional feature, your clients will receive funding to accelerate the complete repair or replacement of stolen or destroyed insured property. As a result, the chance to get the project back on track after an incident is made possible.
Unsold Dwelling
Another feature your clients may need is Unsold Dwelling or Third-year Builders Risk Policy. As the name implies, this policy covers unsold dwellings for a certain number of years after construction is completed or almost finished.
This type of insurance can come in handy if your client has not yet sold the new building. This may result from the market being down, mortgage restrictions, or another external factor. The Unsold Dwelling coverage will protect your client’s investment in case of a loss resulting from an insured peril such as a fire, theft, or storm damage.
Water Intrusion
This coverage enhancement is offered for new commercial construction projects valued at up to $75 million. If a building is not entirely enclosed, rain, snow, ice, and sleet can easily penetrate it, causing damage.
Adding coverage for water intrusion can be an inexpensive way to protect your client from major losses that may happen due to these environmental elements. This coverage should also be added when other protection isn’t available, such as if the property is vacant or under repair.
Having additional Builder’s Risk Insurance features means your clients have all their bases covered and will not have any unexpected expenses coming out of ther pocket.
Change Order
When the project value has been set, and a Builder’s Risk Insurance is secured, your client’s sudden change of mind on building materials or plans can cost them a lot of money. Modifications frequently enhance the project’s worth but are often unreported to the insurance company, resulting in underinsured construction.
However, if your clients purchase a policy with the Change Order endorsement, their Builder’s Risk Insurance will cover extra costs from agreed-upon change orders up to 10, 20, or 30 percent of the contract value.
When a change is made to the project, a customer is supposed to call you to update their coverage limit, but if they don’t, this endorsement will still protect them.
Ordinance or Law
Another must-have feature of a Builder’s Risk insurance is the ordinance or law coverage, which allows your clients to recover costs for unexpected losses due to required regulations. This can include additional addons during construction when changes in town building codes happen.
If your client’s project needs to meet specific requirements by city officials and those requirements increase the cost of construction, this feature will provide them with the funding for those additional expenses. Without it, they would be forced to pay out-of-pocket.
Testing of Building System
By acquiring this endorsement, your clients will be given funding to conduct necessary tests to prove the building’s ability to function. Examination, testing, commissioning, or trial inspections are all covered by this feature.
In addition, it allows your clients to recover costs related to the testing of project components or systems before construction completion. This means that if the system installed on their project fails, they’ll be provided with funds to replace it.
Having these additional Builder’s Risk Insurance features will provide your clients with the opportunity to fix any unexpected error without having to pay for it themselves.
Conclusion
You may be surprised by how many of your clients don’t know the additional features of a builder’s risk insurance.
Fortunately, this blog post has outlined them for you to help ensure that they’re not let down in the future when it comes to this essential coverage.
Snyder Specialty
Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039.
