Builders Risk Insurance (Quotes, Cost & Coverage)

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Frequently Asked Questions About
Commercial General Liability Insurance

How much does commercial insurance cost?

Costs can vary widely based on industry and are also determined by zip code and often payroll and/or gross sales. Request a free quote to get an exact number.

What kind of business insurance do I need?

Most business owners need General Liability Insurance at the very least. If you have any non-owner employees, you will need workers compensation insurance too.

What is a Certificate of Insurance?

A Certificate of Insurance is proof of coverage. It lists the type and amount of liability coverage you have and other policy information when a third party requests it.

Is business insurance tax deductible?

Yes. you can deduct the cost of commercial insurance premiums. The IRS considers insurance a cost of doing business as long it benefits the business & serves a business purpose.

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Builders Risk Insurance

Builders Risk Insurance

Builders Risk Insurance. Custom homebuilders, general contractors and even property owners often find themselves searching for insurance coverage to protect personal or business projects under construction. With builders risk insurance, they can get comprehensive coverage against all construction related risks.

Builders risk protects a person's or organizations insurable interest in materials, fixtures and/or equipment to be installed during the construction or renovation of a building or structure should those items sustain physical loss or damage from a covered cause. It is often required to comply with government regulations or as a condition to meeting banking or other contractual arrangements.

Builders risk insurance protects your contracting business from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.

What Is Builders Risk Insurance

While a builders risk insurance policy itself is relatively simple to obtain, ensuring the proper coverage, limits and policy type are in place requires a core understanding of the industry and the associated risks which occur during the course of construction.

Coverage is usually written on an all risks basis (coverage that can exclude only risks that have been specifically outlined in the contract) and typically applies not only to property at the construction site, but also to property at off-site storage locations and in transit. NJ builders risk insurance can be written on either a completed value or a reporting form basis; in either case, the estimated completed value of the project is used as the limit of insurance.

What Does Builders Risk Insurance Cover?

A builders risk insurance policy can be structured to cover the following:

Your Buildings. Helps cover the building and structures at the described premises including: Garages, storage buildings, swimming pools, fences, retaining walls, both completed additions and additions under construction and other appurtenant structures. Building coverage also includes owned personal property used to maintain or service the building and premises.

General Liability. To help protect the insured against legal liability caused by bodily injury, property damage, personal injury, and advertising injury to others.

Profits. builders risk insurance covers more than just labor, materials and equipment that are needed for new construction project; it can cover profits as well. With this insurance, contractors can be reimbursed for the pro rata percentage of profit earned as of the date of the loss - based on the profit assumptions included in the job estimate.

Equipment Breakdown. Provides coverage for damage to covered property caused by mechanical breakdown of covered equipment, artificially generated current damaging covered equipment, explosion of steam boilers or loss of steam/hot water boilers.

Valuable Papers and Electronic Data. Contractors and construction companies rely on blueprints, schematics and other paper and electronic documents and data in the course of conducting their business. NJ Builders risk insurance provides up compensation to research, restore and replace important documents and electronic data that were lost in a covered risk.

Modular Components. Businesses often store important and expensive materials and equipment in off-site modular units. With builders risk insurance, such modular units and components are covered while they are being used for temporary storage or in transit. Location of the storage unit does not need to be listed in the policy.

Testing. Construction and contractor businesses often test out newly installed equipment. In the event of a physical loss caused by electrical, mechanical, pneumatic and hydrostatic testing, builders risk insurance policy can help cover the costs of the loss. Broader testing coverage can be added to the builders risk insurance policy to include boilers, production equipment, pressure vessels and power generation equipment.

Ordinance and Law. Covers the increased cost to repair or rebuild due to the enforcement of municipal laws or ordinances regulating the construction or repair of damage buildings caused by an insured loss.

Identity Restoration. Coverage for the chance you, the business owner, become a victim of identity theft.

Limits Of Coverage

The NJ builder's risk insurance policy will pay for damages up to the coverage limit. The limit must accurately reflect the total completed value of the structure (all materials and labor costs, excluding land value). The construction budget is the best source for determining the appropriate limit of insurance.

Builder's risk insurance policies can often be written in terms of three months, six months, or 12 months. If the project is not completed by the end of the initial policy term, it can often be extended, but usually only one time.

What Is Excluded From A Builders Risk Insurance Policy?

Note that these policies do not cover accidents and injuries at the workplace or liability risks. They will also exclude certain acts of nature, such as earthquakes and floods. Typically you can buy flood insurance and earthquake insurance separately. Be sure to work with an agent who will help assess your risks and can review your coverage carefully.

How Much Does Builders Risk Insurance Cost?

The policy will typically be in the range of one to four percent of the construction cost, but it will depend on the type of coverage and exclusions that the policy will have. The importance of having a solid insurance company is that they will expedite your claims and will help you solve any potential claims during the construction process.

Some companies can cover the soft costs of the project, but you will need to ask the insurance company to include it in your coverage but be aware that this might increase the cost of your builder's risk. The builder's risk insurance is part of your project's soft costs and even though it will cost you some money, it is better to have it than not having it when is needed.

Who Buys NJ Builder's Risk

Coverage is often purchased by the custom builder and may also be purchased by the property owner. The term "builder" is misleading because insureds can include not only the contractor(s) performing the work, but the ultimate owner, lending institution and others.

Many architects believe that it is the property owner who should have the builder's risk policy, because they have already paid for the improvements to their land, and if the builder receives the funds directly from a claim, theoretically, he/she could abscond with that benefit.

It is far safer for the property owner to obtain the builder's risk policy, because they already own the building, even while it is under construction. If something happens to the under-construction project, then they should be the beneficiary and control how it is spent. Yes, the builder ends up receiving the funds in the end, to rebuild damage, but this method gives the control of the insurance benefit to the owner. Suppliers of materials, although having an insurable interest in the property being used in the construction, are not normally candidates for builder's risk insurance.

NJ Builders Risk Insurance

Builder's Risk Insurance can be especially important if you are working with materials that are prone to damage, or if you are working in an area that is prone to certain types of severe weather. It is also important coverage that protects your investment from unforeseen risks. Be sure to work with a knowledgeable commercial insurance broker when choosing the type and amount of builders risk coverage you need.

Small Business Economic Data & Insurance Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. Maybe you want to contribute to the economic growth of your community. Whatever the reason is, if you're thinking about starting a small business, it's important to understand pertinent information relating to small businesses in the United States; namely economic information and insurance regulations. After all, if you want your small business to succeed, you have to understand the economic trends organizations of a similar size in your area.

Likewise, you want to ensure that your small business is well protected with the right business insurance and that you are in compliance with the rules and regulations that pertain to commercial insurance in your region.

Small Business Information

Read up on economic statistics and insurance information that relates to small business owners in the United States.

Small Business Economic Data In The United States

Here's a look at some information that was compiled by the Small Business Association (SBA) regarding the economic data that pertains to small businesses in the United States:

  • In 2015, small businesses in the United States employed an estimated 58.9 million American workers, or 47.5 percent of the nation's private workforce.
  • Largest shares = fewer than 100 employees. The small businesses that employed 100 people or less had the largest share of employment amount small businesses.
  • Employment increased by nearly 2 percent. In 2018, employment amongst small businesses increased by 1.8 percent, which is an increase of 1 percent from the prior year.
  • Increase in proprietors. In 2016, the number of small business proprietors increased by 2.3 percent.
  • In 2015, small businesses were responsible for creating 1.9 million net jobs. Organizations that employed 20 people or less had the largest gains, as they added an estimated 1.1 million net jobs.
  • There were 5.7 million loans that were value less than $100,000 issued by lenders in the United States in 2016. These loans were issued under the Community Reinvestment Act.
  • Small business owners that were self-employed at the incorporated businesses that they owned reported a median income of $50,347 in 2016.
  • Small business owners that were self-employed at the unincorporated businesses that they owned reported a median income of $23,060 in 2016.
Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage. The SBA recommends the following insurance plans for small business owners:

  • Commercial Property Insurance: In the case of an unplanned disaster - fire, flood, vandalism, theft, etc. - this type of coverage will help you avoid paying for the damage out of your own pocket. Even if you rent the property, you should still carry commercial property insurance.
  • Commercial Liability Insurance: In the event that a legal situation arises - a negligence lawsuit, for example - commercial liability coverage will provide financial protection. It will cover the cost of legal defense fees, court fees, and even moneys that may be awarded.
  • Commercial Auto Insurance: If you operate a vehicle for any activities that are related to your business - transporting and/or delivering goods, or meeting with clients - commercial auto insurance is legally required for businesses of all sizes, including small businesses.

Additional Resources For Contractors & Home Improvement Insurance

Learn about small business contractor's insurance, including what it covers, how much it costs - and how commercial insurance can help protect your contracting business from lawsuits.


Contractors And Home Improvement Insurance

If a contractor wants to begin or stay in business, liability coverage must be obtained for the premises or operations, off-site locations and products/completed operations exposures. These coverages may be included as a part of a businessowners policy (BOP) or purchased in a commercial general liability (CGL) policy. Owners and contractors protective liability and railroad protective liability coverages may also be required in certain cases in order for a contractor to obtain a particular job.

Many contractors do not have the usual location-specific buildings and business personal property exposures. Their business property is more mobile and, therefore, better covered with inland marine coverage forms. However, for those larger contractors that own buildings and/or maintain business inventory there are many coverage forms and choices available to them.

Contractors use their vehicles to get to and from their workplaces and jobsites. They also use vehicles to transport equipment and inventory to those locations. It is important to cover the liability of these vehicles for injury or damage they may cause, as well as to provide coverage for damage to the vehicles themselves.

Employers are required to provide coverage for injuries sustained by their employees while on the job. Contractors must comply with these requirements but some try to avoid them by hiring subcontractors. These subcontractors may actually operate and qualify as employees. The relationship between a contractor and its subcontractors must be carefully evaluated in order to determine if workers compensation coverage is still needed.



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Builders Risk Insurance
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Quotes from leading small business insurance carriers including: ACE, AmTrust, Chubb, Cincinnati, CNA, Colony, Employers, Evanston, Fireman's, Foremost, Guard, Hanover, Hiscox, Liberty Mutual, LLoyd's of London, Markel, MSA, Nationwide, Penn America, Philadelphia, Prime, Progressive, Scottsdale, The Hartford, Travelers, USLI, Utica First, Western World, Zurich & others.

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