Are you working on a construction or rehab project? Protecting your projects, and keeping your lenders happy are critical to your business. Florida builder’s risk insurance provides coverage for projects anywhere from basic rehabs to structural renovations and even new construction!
What Type of Coverage Do I Need?
Builder’s risk insurance is different than your regular homeowner’s or landlord policies. Most of your projects are probably vacant during a rehab or new construction. You want to make sure that vacancy is properly accounted for in the policy and that your materials and construction costs are covered, too. This is what makes builder’s risk more unique, but also very important if you’re flipping houses or building new construction.
Important Selections for Your Policy
- New Construction
- Remodeling/Renovation – (Usually must be a larger renovation, otherwise you may need Vacant Home Insurance coverage)
- Including coverage for an existing structure
- Excluding coverage for an existing structure
Type of Policy
- One-shot – single project – 6, 9, or 12 month terms
- Reporting Form – multiple projects within 12 month period, must report new projects monthly
If you are doing a rehab and don’t have other coverage, you can include the existing structure in the builder’s risk insurance. If you are a homeowner and you are just looking to insure a renovation project, you can exclude the existing structure if you already have homeowner’s or landlord coverage for the structure itself.
Total amount of the project for new construction or the cost of renovations on a rehab project. You want to make sure these improvements are covered properly on your policy, and that’s one of the important parts of a Florida builder’s risk insurance policy.
These coverages are automatically included with a specific limit from many of the carriers that we use. You can increase these if needed in most cases. Always check your policy documents to make sure that it applies to your policy.
- Back-up or overflow of sewer, drains, or sumps
- Claim preparation expense
- Contract penalties
- Debris removal
- Fire department service charge
- Pollution clean up and removal
- Scaffolding, construction forms, and temporary structures
- Scaffolding re-erection
- Property at temporary storage location
- Property in transit
- Valuable papers and records
A good builder’s risk insurance policy offers a lot of optional coverages. Some of these may provide great protection for your project, or you may choose to decline some of these based on your scope of work and what you want coverage for. (This are some of the optional coverages, but there may be more. Review your policy or talk to our team for specific details on each coverage.)
- Wind (this is important in Florida, but isn’t a required coverage.)
- Better green – green building construction
- Extra expense
- Expediting expense – costs to expedite permanent repair after total loss
- Change order endorsement – Additional limit of insurance to cover increased cost from signed change orders
- Testing – “hot testing” of systems after covered loss
- Soft costs – covers soft costs that would not have been incurred except for delay due to covered loss.
- Equipment breakdown
What About Liability?
Liability is an important coverage as well. You may be able to add the project location on your general liability policy, or some carriers do offer an option to include liability on your new builder’s risk policy. You definitely want to make sure that you have this coverage, but there are several different ways to do it. We are always happy to discuss your options and see what would work best for your situation.
Getting Your Builder’s Risk Insurance Policy
We can help at anytime, so don’t hesitate to call. The more notice you can give us, the better, though. We always want to have your coverage in place before your project needs to start, and certain coverages and areas of Florida require specific underwriting approval. This can cause some delays if you need to bind a policy immediately.
We hope this information is helpful for you. We hope your project is successful, and hopefully we can be a small part in that success. Contact us today 813-425-1626!