Understanding Builder Risk And Extension Insurance Plans

If you are completing some renovations on a commercial building, then you always want to make sure that you are properly covered with a builders' risk insurance plan. This way, you can reduce your risks in case accidental damage occurs. You should also look at adding on an extension policy in certain situations. Keep reading to understand what this means and also when it is best to do so.

Understanding Risk Insurance

A typical risk insurance policy will cover any damage caused to a building while your business completes work. This includes acts of nature like hail, lightning, earthquakes, tornados, and floods. It offers protection against thefts too, whether they occur from outside sources or individual employees working for you. Vandalism is also something that you are protected from.

You should know that this general protection covers a certain percentage of your construction costs, and this percentage will vary depending on the type of policy you choose. A typical one will cover up to about 4% of your costs. However, you can purchase ones that are a bit more extensive, especially if you are completing a risky construction project or if your construction budget is relatively high.

And while your common builder risk insurance policy will cover quite a few different incidents on the job site, you may need to be worried about a few specific situations. This is where your extension policies come in, and you may need several of these to make sure that many, if not all, of your risks are reduced.

Extension Risk Policies

Unlike your general builders' risk insurance policy, your extension plans cannot be purchased independently of a larger plan. In other words, they are add-on policies that must be chosen in addition to your other liability policies. 

When it comes to extension insurance, you can purchase a policy protecting you from losses that occur to your building materials. This means coverage for thefts, vandalism, and acts of nature like a flood ruining your belongings. The policy can cover materials in transport as well as ones that are in storage after being purchased for the specific building project.

Extension policies are also able to cover any damage that occurs to a temporary structure, like an on-site trailer or office, that is constructed to serve as a meeting site while working on the project.

Some extension policies will even cover your expenses that are incurred while you remove debris and damaged objects that result from fire, flood, and vandalism incidents. Replacement costs may also be covered as well.

If you want to know more about the types of insurance that are available to you as a builder, speak with an insurance provider.