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What Is Not Covered With Builder’s Risk Insurance

Embarking on a construction project is a blend of creativity, engineering, and meticulous planning. Amidst the hustle and bustle of building dreams into reality, safeguarding your investment from potential risks is a critical consideration. Builder’s Risk Insurance Policy steps in as a protective umbrella, shielding your project from unforeseen events. 


However, it’s equally important to grasp what lies outside the scope of coverage. In this guide, we will look at the details of a Builder’s Risk Insurance Policy, shedding light on what this insurance doesn’t cover. 


What is a Builder’s Risk Insurance Policy?

Builder’s Risk Insurance, often known as Course of Construction Insurance, is a specialized policy designed to safeguard construction projects against a range of perils. 


This policy covers the physical structure of the project, materials, and equipment against damages resulting from events like fire, theft, vandalism, and certain natural disasters during the construction period.


Exclusions in Builder’s Risk Insurance: The Gaps in Coverage

By exploring the gaps in this coverage, you will be able to see what might fall outside its protective scope, enabling you to make informed decisions for your project security. Here are some of the exclusions in Builder’s Risk Insurance: 


1. Existing Structures

A Builder’s Risk Insurance policy typically excludes coverage for existing structures on the property where the construction is taking place. It’s essential to differentiate between the project under construction and pre-existing structures on the site.


2. Maintenance or Wear and Tear

This insurance doesn’t cover damage caused by normal wear and tear, faulty maintenance, or inadequate upkeep of the project. So it is crucial to ensure that you’re conducting proper maintenance throughout the construction process to avoid any complications with your insurance coverage.


3. Faulty Design or Workmanship

Builder’s Risk Insurance usually does not extend to damages arising from defective design, poor workmanship, or planning errors. As such, attention to design and workmanship becomes essential in minimizing potential gaps in coverage.


4. Intentional Damage

Damages caused intentionally, whether by you, your employees, or other parties, are generally excluded from coverage. This is in place to stop any deliberate acts of damage, vandalism, or sabotage in order to get compensation.


5. Employee Theft

Theft or damage caused by your own employees is not usually covered by Builder’s Risk Insurance. This exclusion shows the significance of internal security measures and employee supervision in construction projects.


6. Deliberate Delays or Penalties

Losses resulting from deliberate delays or penalties, intended to gain extra time, are typically not covered. This is in place to ensure that legitimate and unforeseen events are addressed.

Why Understanding Exclusions Matters

Understanding what a Builder’s Risk Insurance policy doesn’t cover is as important as comprehending what it does cover. This knowledge empowers you to take necessary precautions, avoid potential gaps in coverage, and make informed decisions for your construction project.


Guarding Your Construction Project With Bethany Insurance

When it comes to protecting your construction investment, partnering with experts who specialize in insurance solutions is invaluable. Bethany Insurance is equipped to guide you through the intricacies of Builder’s Risk Insurance, helping you tailor a coverage strategy that aligns seamlessly with your project’s unique needs.


Contact our team of experts today to ensure your project’s success in the face of uncertainties.