It is the responsibility of the property owner to purchase property insurance before the construction of the building starts to cover any damage or loss that may be incurred during the construction.
With the financial risk involved in construction projects, both the property owner and the contractor must have multiple insurance options they can choose from. The two most common types of property insurance most contractors choose based on risks and needs of each job are installation floaters, and builders risk insurance.
Commercial builders risk insurance is usually purchased by the property owner to protect the construction project from any loss due to damage or destruction of the property while it is being constructed. Builders risk insurance pays for the damage to construction materials or partially completed work caused by accidents, fire, theft, vandalism, material defects and poor workmanship. Builders risk insurance ensures contractors that the time and money invested in the construction of the building or any structural projects are not lost should something affect the costs of repair, repurchase, or reconstruction increase, which reduces their profit.
Meanwhile, installation floater protects specific objects that a contractor plans to install on the building. It also covers of personal properties and other items that can be moved from one place to another, such as electronics, furniture, or jewelry. When these moveable items are damaged or lost during transit or while stored at the construction site, installation floater compensates the property owner or the contractor. However, installation floater does not pay for the damage that exists in any existing part of the construction project caused by improper installation.
Property owners and building contractors prefer builders risk insurance over installation floaters because of its more comprehensive coverage. Furthermore, builders risk insurance is more useful to contractors who do completely new construction projects or take major renovation duties.
Planning a special event in the near future? You should consider getting insurance for the event to take care of any liability. A special event insurance policy is not an isolated insurance concept. The business market is filled to the brim with countless insurance concepts and companies that offer insurance policies. However, whether it is special event insurance policy or any other policy, there are few things that must be considered before you go buying that policy. Such factors actually, play a vital role in either jeopardizing or validating the worth of your decision.
You may be aware of the three thumb rules of this industry, which includes financial stability, premium affordability and customer satisfaction. These three rules not only help you in determining the best insurance company for yourself, but they also formulate three integral aspects of insurance companies. So, let’s consider the financial stability factors in more detail.
Financial stability is the prime feature when you are considering a company’s worth as an insurance provider. When it comes to getting hold of a special event insurance policy, you need to be sure that you are not going to end up in big risk area! Moreover, you must also be certain that the company has the perfect services that satisfy your need best. This is very crucial because, you would never want to suffer the loss of thousands of dollars in case an accidental happening spoils your special event and your insurance company also faces failure in supporting you. So, try finding out the financial strength of an sports liability insurance company by checking out the financial stability ratings. You can view these ratings in insurance reports. So, next time when you set out to get an insurance policy, make sure that you have double-checked the financial aspects.
The work of technology professionals is becoming increasingly demanding. There are several complications involved, and litigation is the last thing any technology professional would want to deal with while doing his/her job. Fortunately, insurance companies and providers have been able to come up with various policies to suit the specific needs of different professionals; and technology professionals are certainly not left out. Today IT insurance for technology businesses exists and meets the needs of the information technology professional or business. For example, a technology errors and omissions’ insurance policy is a basic insurance policy every technology professional is supposed to have. The policy provides much-needed coverage in the event of expensive and taxing litigation that could very possibly befall a technology professional. Given the enormous amounts of time that are typically consumed during drawn-out legal battles, and the often resulting high legal fees and settlement costs (be they pre-awarded or post-awarded), taking out a technology errors and omissions insurance policy is very likely any technology professional’s safest bet. In fact, for companies that provide services of an extremely delicate nature, taking out an adequate technology errors and omissions insurance policy is a requirement for major contracts.
Errors and omissions insurance policies are very important; it is equally important for one to know exactly how best to go about getting them. When considering taking out a particular insurance policy, one of the most important things to consider is the coverage limit. Reviewing the range of services one provides as a technology professional, and assessing worst-case scenarios, are ideal ways to determine the extent of coverage that is most suitable for one’s specific needs. It is important; however, to note that the appropriate level of coverage is also dependent on a number of other factors such as the specific nature of the services’ one provides, the class of clients one regularly services, and the most probable financial implications of any possible errors or omissions. It is very important for insurance coverage limits to always be reasonably proportionate to policy contract costs or expenses. Coverage limits that are proportionately lower than a level of insurance costs involved could prove to be quite deadly.
Contractors or builders can insure their construction projects by buying what is known as builders risk insurance policy. Construction insurance policies are meant to protect structures being built or renovated by insuring them against all conceivable risk or threat that could become liable during the construction period. Once the construction is finished, the policy also ends. Builders Risk Insurance policies are flexible and can be tailored to meet the demands of the construction project. Since every construction project varies, construction insurance policies are structured differently. There are four ways on how a Builders Insurance policy is structured.
- Single Shot
With this structure, separate policies are issued for each house being built. There is usually a $350 minimum premium. If the house is completed before the policy ends, there is no refund handed out. The builder must provide all the pertinent information (such as location, square footage, total cost, etc.) before the policy is delivered. This type of construction insurance policy is recommended for builders in custom construction with high values or those constructing five or fewer homes per year The Single Shot structure is not for volume builders.Disadvantages: Builders can forget to communicate with his agent to have the policy issued. This demands more and better communication between the insurance agent and the builder. The builder needs to provide all the pertinent information to the agent each time so to complete the application and secure the policy. If the policy is not secured, there will be no coverage and rates are usually higher.
- Monthly Reporting Form (Monthly Rate)
Every month, the builder will complete a report citing his existing inventory for the previous month. The builder will apply the rate to the total inventory and computes his monthly premium charge. The builder will send a check along with the monthly report to the insurance company. When a house is completed or sold, it will not be included on the next monthly report. The rate of this policy structure is less. If the builder completes a house in less than 5 months, he will pay less. Builders are not required to communicate with their agents when a new construction is started. Volume builders should have this structure as they can turn over houses quickly.Disadvantages: Inventories each month can be very demanding. Sometimes, remembering to list houses being constructed can be a problem.
- Monthly Reporting Form (Annual Rate)
The monthly report in this structure will contain all new starts for the prior month. The builder will apply the rate to the total amount of all new starts and compute his monthly premium charge. Just like the previous structure, the builder will send his payment together with the completed report. Since the new starts are covered for 1 year, it is not required that they are included in the report, unless they are not completed by the end of the 12-month term. This policy is best for those builders who usually spend more than six months in completing their project. Only new starts are cited in the report monthly, and the builder doesn’t need to contact his agent from time to time.Disadvantages: The builders still need to accomplish reports every month.
- Blanket Annual Deposit
Among all the policy structure, this is the easiest for builders. A builder will estimate the finished value of the number of new starts expected for the next 12 months plus homes that will be in existing inventory for more than one year. The insurance company will apply the rate of total projected annual values. Many insurance providers offer a payment plan in this type of policy. At the end of the policy period, the policy is subjected to audit. The audit will determine if the builder started more houses than expected or fewer than the anticipated number. With this structure, the builder has fewer administrative hassles.
The construction project is almost done when the building beside your project gutted it out causing damage to the property. You know you will lose money and potential income with the damage caused by the fire. However, if the project is covered by builders risk insurance, you can easily file a property claim to reimburse the damages.
Builders risk insurance is a form of property insurance that is used to look after the property owner and the contractor against damages and losses due to fire, accidents, theft, or vandalism, while the building or any property is under construction, renovation, or repair.
There are four basic types of policies for builders risk insurance — the monthly reporting form (Monthly Rate), the Monthly Reporting Form – Annual Rate, the Blank Annual Deposit, and the Single Shot policy.
Among the four types of builders risk insurance policies, property owners and contractors choose and recommend Monthly Reporting Form (Monthly Rate) over other types. This type of builder’s risks insurance policy is perfect for general contractors who are doing several projects at the same time because of its lower rates and less premium payment if the project is completed in less than five months.
When using a monthly rate reporting form, the contractor completes a report of his entire inventory before the end of each month and applies the value to the total cost of inventory. Afterwards, the monthly premium charge is computed before sending the check to the insurance broker together with the monthly report.
However, it is tedious due to the maintenance of inventory each month. Moreover, the contractor has to keep a record of each progress in the project. Additionally, when the project is completed, it is no longer included in the list of the next monthly report.
First and foremost a builder’s risk insurance policy protects the home builder or contractor, not the home owner. This insurance is temporary – usually for the term of the construction effort or until the home owner accepts the home and occupies it. This insurance coverage protects the contractor from theft, weather and other “natural acts,” vandalism, etc. Different carriers and policies cover different hazards, so make sure it covers everything needed – including a reasonable profit! Premiums are set by the value of the property(s), so don’t overestimate.
Types of builder risk insurance policies:
- Single Shot – a policy for one home. Has the least expensive premium.
- Monthly or Annual Rate/Monthly Report – a policy that covers all the builder’s inventory, is paid for monthly or annually, and requires a monthly report to the carrier
- Blanket Annual Deposit – premium based on estimated value of inventory and anticipated starts in next 12 months.
So, you’ve “bit the bullet”, so to speak, and you’ve decided to invest in your next big investment: your house. Did you know that Builder’s Risk insurance can help with that? If you are a homeowner, monthly builders risk insurance may work best for you. With monthly builders risk insurance, you will be required to keep track of the materials and tools you use monthly, and report on them. This is the only downside to purchasing builder’s risk insurance monthly. However, by keeping track of all the details, you will find that all of the materials you are putting forward towards your house are protected and your house, your newest, biggest investment, is as well.
When it comes to builders risk insurance and selecting a policy there is a lot of information you should know. First keep in mind that there are many different types of builders risk insurance for you to choose from. One of the easiest is called the blanket annual deposit.
With this policy you are basing your insurance on the estimated amount of new business for the year. You can also include the homes that will be in inventory more than twelve months. The insurance company will provide you a rate based on this information.
The cool part about this is that most construction insurance companies will allow you to pay them monthly for this type of policy. This has a direct benefit to a small company because it is not all due in a lump sum payment. Spreading the bill out allows you to collect money and pay your insurance payment every month. There is an audit with this type of service which means if you build more houses you will have to pay the insurance company more. However, for many builders this is still an awesome plan.
Vandals often target home construction sites and often target them for material theft or for malicious destruction. When this happens, replacement and repair costs fall on the builder. Similarly, storms and fire can damage or destroy homes under construction. Because of these risks, every builder and contractor should carry builders risk insurance. This temporary property insurance protects builders during construction.
Builders should have risk insurance in place for a project in time for the first delivery of supplies to the construction site. With a policy in place, contractors have protection if they disappear. Risk insurance policies vary among insurers, so builders must make sure their coverage includes loss of unused material and the collapse of partially-completed buildings.
Some contractors make the mistake of relying on homeowners to buy builders risk insurance only to find out that they either bought inadequate coverage or forgot to buy it altogether. When this happens, builders wish they bought the insurance themselves because they suffer significant loss.
You may not have knowledge about the kind of builders risk insurance to apply for to cover your property that is under construction by your builder. It is important to inquire from your contractor insurance agent who will guide you on the appropriate cover to take for this project. In addition to that, you will have to estimate the charges of that policy and see if it will suit you.
Also let your builder risk insurance broker understand the kind of home you want to construct so that he can advise you more to gather enough information. Make sure you ask your builder if they have builders risk insurance coverage if not make sure they get a risk insurance quote from a qualified insurance agent.