The ins and outs of Builders Insurance

Builder’s insurance is a special type of property insurance that protects against any damage incurred on a building while it is undergoing construction or renovation. It provides protection to the policyholder’s insurable interest in any equipment being used or stored at the site. Materials and fixtures, any structural damages that occur during the project, or any other physical losses are covered by the policy.

Builder’s insurance is a necessity because many things can happen to a structure while undergoing construction, including fire, and damage from other forces of nature.

If you are in the market to purchase builder’s insurance, or are wondering if it will be required for a potential project, take a few minutes to read this guide to the basics.


Who buys Builder’s Insurance and what does it cover?


Generally, coverage can be provided by the builder or general contractor. Property owners are eligible to seek a policy too. An insurance certificate may be required to comply with local building legislation and obtain any necessary permits.

In an ideal situation, the homeowner should be the holder of the policy as they are the ones that made the investment into the property improvements, and if claim benefits were paid out to the builder there is a possibility of dishonourable conduct.

Coverage on builder's insurance generally would include random occurrences like vandalism, theft, weather damage and other specificities. Other perils, like flooding and earthquake may not be covered, so if thee details are pertinent to your region be sure to make certain they are included in the policy.

Take care, however, because these policies don't cover workplace accidents and injuries, and the policies expire when construction is complete, and the property is ready for occupancy.

You may add builder’s public liability insurance and employer’s liability to be protected from accidents and injuries while construction work is carried out. This is not included to your standard policy, but check with your insurance company for terms and conditions.  

A viable alternative to purchasing a separate insurance policy if you are renovating or adding to an existing structure, it may be possible to add extra variances to an existing homeowner's insurance policy. Be sure to contact your insurance provider to see if this is an option for your project. New builds however, are not likely to have any existing insurance coverage in place.


How to secure a good insurance policy


Shopping for a good builder’s insurance policy should be approached much in the same fashion as looking for home, automobile or life insurance policies. As a matter of fact, once you start investigating you will realise many of the same large-scale insurance providers that cover your other insurance needs also offer this type of protection.

Try inputting your details into several online quote generators to provide ballpark estimates of the costs and coverage available to you, and be sure to review comparable sources to make sure you are maximising your benefits.

The cost of builder’s insurance will vary greatly in price, with the cost relying on several factors like size of the dwelling, likelihood of an occurrence and claim history of the area, and therefore giving an estimated cost on a policy is impossible. Securing accurate quotes from reputable providers such as Aviva, Titan, Home Protect and the Co-Operative will give a better approximation of price. There are a wide variety of different policies out there for builders insurance, so do make sure you read the exclusion carefully before choosing your cover.

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