During the course of construction, Builders Risk policies cover buildings and other structures and personal property exposed to direct property loss. Damage can come from obvious perils such as fire wind, flood, etc. It can also come from faulty workmanship or design error.

Your Builders Risk policy should include all fixtures, materials, machinery, and equipment that constitute a permanent part of the structure. Make certain there is coverage for damage to foundations, including pilings, since this can be a significant loss exposure during construction. The policy should also cover equipment, machinery, materials, etc., that have not been installed but which are destined to become a permanent part of the structure. Builder’s Risk will also include coverage for damage to property of others for which the insured may be liable.

Builders risk coverage normally remains in effect until the entire construction process is completed, at which time the project owner’s permanent property policy should become effective.

Installation floaters, often written in conjunction with builders risk policies, are generally associated with plumbing, heating, cooling and electrical systems, but can insure any property being installed. Carpeting, tile, glass window frames, elevators and machinery are examples of property that can be covered.

 

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

 

Excluded Property

Property excluded under builders risk policies and installation floaters vary from one insurer to another.

The following properties may be excluded:

• trees, shrubs, grass, plants, or land values;
• plans, drawings, designs, blueprints, or specifications;
• property in storage, unless it has been specifically assigned to the job site;
• machinery, tools, equipment, and property of a similar nature not destined to become a permanently attached part of the building or structure; and
• existing property to which alterations or additions are being made.

Covered Perils

The majority of builders risk and installation floater forms provide “all-risk” coverage meaning that unless specifically excluded the peril is covered. The following are typical exclusions found in builders risk policies:

• error, omission, or deficiency in design, faulty workmanship, or faulty materials;
• subsidence, settling, cracking, shrinking, bulging, or expansion of foundations, pavements, sidewalks, driveways, walls, patios, floors, roofs, or ceilings unless caused by specifically perils;
• loss or damage caused by rain, snow, or sleet to property in the open that is not a permanent part of
• the structure or installation (property in the custody of carriers for hire excepted).

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Dear Valued Customer,

In this issue of “—————–” we focus on Builders Risk & Installation Floaters.

Many coverage decisions need to be made when commercial buildings are under construction. That’s when Builders Risk and Installation Floaters need to be considered and implemented.

Read on for a primer on the basics of both Builders Risk and Installation Floaters. When is one – or both – of these coverages necessary, and why? We will also point out some of the coverage points and exclusions that preclude coverage for normally occurring losses, and much more.

We appreciate your continued business and look forward to serving you.

Kind regards,