Whether you are building a new home or undergoing renovations on your current home, it is an exciting, hectic time that comes with lots of stress. Between budgeting, figuring out timelines, coordinating with contractors and balancing your everyday life, insurance is a piece of the puzzle that is often overlooked amidst the chaos.
A construction site carries a number of risks for the property owner, with contractors and sub-contractors coming in and out, heavy and dangerous equipment lying around as well as unsecured structures and property. There is lots of potential for accidents and property damage to occur. Many homeowners will rely on the contractor’s insurance or simply assume their regular home insurance policy will include coverage for renovations. With the investment you’re making into a home, it’s important to make sure you are adequately protected in the event something goes wrong.
Your home insurance policy does not contemplate a number of the risks associated with building and renovation. A Builders Risk Insurance policy, on the other hand, is specifically designed for property while it is under construction.
Builders Risk insurance serves as protection for both property owners and contractors. Although this can be purchased by either party, your contract should stipulate who is responsible for purchasing the insurance. It is recommended that you purchase this insurance in your name so that, in the event of a claim, you have full control on the decision making process. If you agree that the contractor is responsible, it is best that you obtain a copy of the policy and have it reviewed for the appropriate coverage and limits. You may find that the contractor’s policy is not sufficient and that you may need to purchase your own. Either way you should have your name added as an Additional insured to the Contractors Liability Policy for the project.
Contact your CapriCMW Advisor if you are planning to undergo construction on your property to ensure you have what you need before the project begins.