COVID-19, as we all know, has affected more than millions of people around the world. Other than our way of living, businesses also experienced the effects of this virus, especially in the construction industry. With thousands of restricted operations, COVID-19 has made the construction of buildings difficult and more complex. The aftermath of the virus has made it hard for companies to continue with their day-to-day procedures. There are now more risks involved, dangers that need to be addressed, and issues due to COVID-19.
With that said, having a builder’s risk insurance in place has been more critical than ever. As a business owner, it’s your responsibility to safeguard your company, projects, and workers. To do that, you need to have a policy that covers all the possible risks that might come up while operating in this particular industry.
What Is Builder’s Risk Insurance
A good risk control program during post-Covid is built on the foundation of a builder’s risk insurance, also known as “course of construction insurance”. Generally, this type of insurance protects structures that are under construction. Its coverage ranges from fire and lightning to theft and vandalism to collapses and explosions to hail and other risks.
In our current situation, anyone works in the construction industry needs builder’s risk insurance. If you have a construction company, no matter the size or scope, it should be included in your insurance policy. It will protect you from future costs and problems in case something goes wrong during the building process.
What Does Builder’s Risk Insurance Cover
Builder’s risk insurance plan helps cover structures and buildings under construction. It will also protect company-owned equipment, tools, and materials. In addition, soft expenses incurred as a result of construction delays caused by a covered risk are also included. Some of these examples are:
- Rental income
- Lost sales
- Added interest on loans
- Real estate taxes
Since every project is unique, each plan is different. Coverage extensions allow you to tailor your policy to suit your project’s specific requirements. Extensions that are commonly used include protection for scaffolding, construction forms, temporary structures, pollutant cleanup, and more.
How Can Builder’s Risk Insurance Help During Post-Covid
COVID has affected the construction industry in many ways. Numerous construction projects are stopped even when they are halfway through. As a result, buildings are highly exposed to risks, damages, and injuries. If not covered properly, it would lead to expensive repair costs and, worse, delay in schedule.
With a builder’s risk insurance plan, you can protect your business and its construction projects from any related problems during and after COVID. Here are just some of the ways a builder’s risk insurance can help:
Income Losses – If a building collapses or is destroyed by a storm or other natural disaster during Covid, you won’t get stuck with its restoration costs. You can compensate for any lost income from delays caused by construction interruptions.
Insurance for Material Damage – This includes the damage or destruction to equipment, raw materials, or any other items needed during construction. If something happens to these hard assets, you can claim the expenses involved in buying new ones out of your Builder’s Risk Insurance coverage.
Removal of Debris – In case anything goes wrong with a covered building during the pandemic, such as an explosion that causes scattered debris, you can use your policy for the cost to remove these hazardous materials. In return, possibilities of lawsuits will be avoided.
Property Theft – Since buildings are technically “abandoned,” chances of burglary and theft may increase. However, you can avoid dealing with unnecessary hassle by using your Builder’s Risk Insurance to pay for the replacement of tools, materials, and other company assets that may be lost or stolen.
Considerations Before Purchasing Builder’s Risk Insurance
Covid might have settled down, but the risk of construction accidents hasn’t. So, before you purchase a Builder’s Risk Insurance, be sure to consider the following top 3 tips:
1. Make sure that you are dealing with an insurance company that is experienced enough to understand construction-related risks. Go for companies that have a large number of brokers who have years of knowledge in this area.
2. Consider how much of your assets you need to cover. Ask yourself if the replacement of equipment and raw materials will be enough. By being prepared, you can protect your company from property damage and income losses due to an unexpected event.
3. Other than Builders Risk Insurance, adding Liability Insurance is a great idea. This can help protect you from third-party claims or lawsuits due to the damage or injury of others during construction projects.
About 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.
