Course of construction insurance can be important for a wide variety of construction projects. But who is responsible for buying this coverage? We dive into the cost of course of construction insurance aka builders risk insurance and who usually pays for it below.
Insights: Course of construction insurance explained
Course of construction insurance, also known as builders risk insurance, is a type of commercial property insurance that covers a building under construction, including one that is being renovated or repaired. Specifically, it protects the structure and any building materials from damage caused by insured perils like fire, theft, water damage, etc.
Who pays for course of construction insurance?
There are many people who could pay for course of construction insurance for any given project. However, generally speaking, course of construction insurance is purchased by the party that has the largest financial stake in the project, as they would have the most to lose if something went wrong. Therefore, it is usually the owner of the commercial property or the general contractor who purchases course of construction insurance. That said, it may also be bought by the property developer, a subcontractor, or a lender.
Factors that influence the cost of course of construction insurance
Insurance companies consider a multitude of factors when calculating course of construction insurance premiums. Commercial property owners and contractors might find it useful to know which details can influence their insurance rates. We provide a list of these factors below.
- The length of time the project will take to complete
- The total cost of the project
- The location of the project
- The total area of the construction site
- The amount of coverage you wish to purchase
- The amount of experience and expertise those involved in the project have
- The quality of the building materials used in the construction of the project
- Other logistical issues, such as where the construction materials are being stored
Course of construction insurance rates
Every construction project is unique. For this reason, course of construction insurance rates varies widely. Therefore, before purchasing a policy, it would be wise to contact an insurance brokerage that can give you a quote on course of construction insurance. For example, here at ALIGNED, our expert brokers take the time to understand your project before obtaining quotes from some of the 70+ top insurance companies we work with. ALIGNED specializes in providing accurate and competitive quotes that ensure you get the best coverage at the lowest possible rate.
How long does course of construction insurance last?
Course of construction insurance coverage typically starts when the project first breaks ground and lasts until it is complete. A project is usually considered complete when the property owner signs off on its completion. Some insurance companies let you backdate your coverage up to 14 days, and others have limits on the length of the policy (e.g. some insurers do not offer policies beyond 24 months).
ALIGNED can help you find the right insurance coverage for your construction project
Now that you know who pays for course of construction insurance, are you ready to purchase it? If so, contact ALIGNED today. We can answer any questions you may have about course of construction insurance, provide you with a free quote, and shop around on your behalf to get you a great rate.
Click Here To Get A Quote or contact one of our business insurance experts for information or with any questions you may have.