Builders risk is a type of insurance that protects builders and property owners for projects that are under construction, renovation, or repair. Builders insurance in Ontario is similar to building or personal property coverage but is used to cover the buildings during construction. The primary difference being other policies may have specific clauses excluding coverage during the construction process. Builders risk insurance provides coverage for projects, whether it is new construction, renovations, remodeling, or improvements to existing buildings.
Coverage provided by a builder’s risk policy is on an “all risk” basis, which includes vandalism and theft for accidental losses and destruction or damage to property for which the insured has an insurable interest. Insureds on a builder risk policy may include the property owner, general contractor, any subcontractors, the bank, or other financial institution financing the project. The architects and engineers may have coverage as well in some scenarios. The property may include the building or other structure involved during the construction, including building supplies and materials used for the project stored on the job site.
If the contractor is not the property owner, they may be added as an additional insured. However, keep in mind that the contractor’s tools are not covered, and they will need to secure their own policy for them. Another often overlooked point of the policy is the actual policy period of a builder’s risk policy and that losses are only covered during the course of the project not before and not after completion. There may be other policy conditions or exclusions as well, depending on the insurance carrier.
A builder’s risk policy from Duliban Insurance may cover the following claim scenarios, but it’s important to discuss the coverages on your policy with one of our licensed insurance professionals.
Commercial Retail Building– Let’s say a contractor was hired to act as a general contractor for a project involving the construction of a commercial retail building. The contractor stored the interior finishing materials for the project in his warehouse a few kilometers from the site of the project. Unfortunately, a fire started in the warehouse, destroying its contents.
Hydroelectric Projects -Take for example an owner and general contractor were prepared to start the construction of three hydroelectric projects. Torrential rains caused flooding and damage to cofferdams and power stations, which led to a delay in the start-up of the project. A claim for over $12 million was made for the physical damage to the project, as well as the lost revenue from the failure to sell electricity for a period.
School – Imagine construction work was being carried out at a school during the summer months when vandals broke into the school at night and started a fire causing damage in various areas of the insured project. Clean up and repairs to the project needed to be completed before the school opening in the fall.
Cooling Coil – Let’s say during the construction of an addition to an existing facility, a subcontractor unknowingly struck an exposed cooling coil which began to leak. A substantial amount of water leaked into the facility going unnoticed as it was hidden deep within the structure. Once the leak was found, there was physical evidence of impact damage to the coil.
Bridge- Or take for example, during the installation of a new steel girder and concrete bridge, the steel girder assembly slipped off its supports, causing severe damage to the end sections of the steel beams. The cause of the loss was determined to have resulted from a poorly designed installation procedure. The damaged parts of the steel beams were removed and replaced with the aid of two large mobile cranes.
Now that you know what a builders insurance policy can protect, it’s important to understand the coverages and limits available. On most builder’s risk policies, the limit of insurance may equal the entire value of the project. Although only a limited percentage of the full project may be exposed to a single loss, coverage may be available for loss limit. Once the project is completed, an appraisal may be conducted to update any value changes.
Types of Projects:
- Residential construction–for project owners, builders, or developers
- Civil works – heavy equipment, tunneling or performing bridge and roadwork
- Commercial, industrial and institutional – office buildings, condominiums, schools or hospitals
Property coverage may include the following on the job site:
- All materials required
- Landscaping, growing plants or trees
- Temporary infrastructure during construction
- Temporary buildings, scaffolding, falsework and hoardings
- Project materials during transit to the site
- All contractors and subcontractors are additional insureds
- Project materials while being stored at another location, waiting for delivery to the project site
Business income coverage for the builder’s or owner’s financial loss if the project is not completed on time, due to an insured loss. Available coverages include:
- Soft costs
- Extended business income for a delayed start date
- Extended rental income for a later start date
Equipment breakdown provides coverage for testing and commissioning of standard building systems and equipment intended to service the building, such as:
- Chillers, boilers, electrical panels, pumps, domestic plumbing, sprinkler systems, air conditioning, and HVAC systems are covered for electrical and mechanical breakdown
Wrap up liability extends coverage meeting the requirements of CCDC and provides comprehensive protection for:
- Project owners, architectural, project managers, and engineering consultants, plus all contractors and subcontractors that may be working on the project
Coverage extends during correction of deficiencies for 365 days and covers third party liability arising from:
- Bodily/mental injury and property damage
- Personal and advertising injury
- Tenant’s property damage
- and more
Other coverage may include:
- Forest fire-fighting expenses
- Coverage for non-owned automobiles
- Residential builder’s risk coverage
We will guide you through all the exposures associated with your project. We’ve got the expertise to provide you with the right insurance coverage for your needs. Before starting any project, make sure you have the protection in place to protect your investment.
Securing the proper builders insurance for your renovation or new construction build doesn’t have to be a confusing process. At Duliban Insurance we are proud to be considered the “hometown” insurance expert. We care tremendously about the community that we live in, and each client’s satisfaction is important to us. Our top priority is to help protect what is important to you and provide the best service possible. That’s why we are happy to share what our customers are saying about working with Duliban Insurance.
“Fast, excellent and easy service.” – Melek B
“Fabulous team. Great prices and service!” – Sam H
“Incredibly responsive and easy to contact. Set up all my insurance policies quickly and painlessly.” – Heather G