What's Not Covered by Builder's Risk Insurance – A Comprehensive Guide

Welcome to another in-depth discussion from the Southern Insurance Group in Greenville, South Carolina! Today, we aim to provide an exhaustive exploration into the realm of Builder's Risk Insurance. This topic frequently piques the interest of real estate investors, developers, builders, flippers, and rehabbers.

At Southern Insurance Group, we frequently write Builder's Risk policies. We've heard a variety of questions and concerns regarding them, and we understand the intricacies and nuances involved.

In this post, we're going to unpack the complexities of what is and isn’t covered under Builder's Risk Insurance.

1. General Liability:

First and foremost, the Builder's Risk policy does not encapsulate general liability exposures. Let's delve deeper into what that means. General liability can be visualized as a safety net, a casualty insurance policy, that guards against financial accountability to an external party. In contrast, Builder's Risk insurance zooms in on first-party coverages – this encompasses your assets, machinery, tools, and upcoming installation materials.

It's imperative to pair your Builder's Risk policy with a casualty policy to ensure all bases are covered regarding general liability exposures. While Builder's Risk policies might be crafted for a definitive duration (sometimes as short as three months), general liability policies generally stretch across an annual term, providing coverage across all jobs undertaken in that window.

For those entrenched in the worlds of rehab, flipping, building, or real estate development, it's paramount to think about procuring a standalone general liability policy. A complementary addition might also be a commercial liability umbrella, effectively covering all construction-linked operations, bodily injuries, and property damages — elements lying outside the purview of the Builder's Risk policy.

2. Business Property and Contents:

Sailing into our second point of discussion, the Builder's Risk policy doesn’t blanket business property and contents. Let’s illustrate this: Imagine you've furnished a property with exquisite sofas or stocked up on uninstalled building materials. The Builder's Risk policy wouldn’t extend its coverage to these assets.

However, fret not! These elements find their shelter under commercial property policies or homeowners' policies, particularly when we're talking about residential properties occupied by the owner.

An essential tip for those in the building sector: If you are storing uninstalled building materials onsite, it could be wise to mull over an installation floater, especially crafted to suit your operations. Remember, knowledge is power. Understanding the ins and outs of what your Builder's Risk policy offers (and withholds) is the key to seamless operations. And that's where the adept team at Southern Insurance Group come to the forefront, illuminating the path for you.

3. Accidents and Injuries to Employees or Subcontractors:

Navigating to our third point, the Builder's Risk insurance policy does not provide a safety net for accidents and injuries befalling employees or subcontractors. This is a critical juncture; these exposures are tailor-made to be encapsulated under the workers' compensation insurance policy.

Engaging employees or recurrent subcontractors necessitates diving deep into worker’s compensation insurance. Builder's Risk insurance steadfastly remains removed from this area, often featuring a direct exclusion in its clauses. Safeguarding a conducive work environment is not only a marker of a conscientious employer but is frequently a mandated regulatory requirement.

Conclusion

Builder's Risk insurance stands as a sentinel, a pivotal component of countless construction and developmental endeavors. Knowledge about its scope (and limitations) is the bedrock for securing investments and maintaining legal compliance.

Builder's Risk policies require a discerning eye and expertise. David Ashton and the Southern Insurance Group team bring both to the table, ensuring that your coverage needs are matched, and potential pitfalls are identified and avoided.

For a deep dive into your specific scenarios, or to untangle any insurance queries, Southern Insurance Group in Greenville, South Carolina, stands ready. Your peace of mind is our business. Reach out and let's ensure you're perfectly covered.