Understanding What's Covered By Miami Builder's Risk Insurance
In Miami, builder risk insurance is known within the insurance industry as all risk
coverage because it meant to cover the wide range of risks associated with any new construction project. The very nature of a construction zone leaves building projects vulnerable to all manner of damages, both man-made and natural, even up to and including criminal activities such as vandalism and theft.The likelihood of project setbacks is so high during building construction that most lending institutions won't back a project unless the contractor has secured a builder's risk insurance policy, and in a few states builder's risk coverage is legally required for any new construction project. Given the potential risks inherent in the construction and development industry, it's important to understand exactly what is- and isn't- covered by your contractor's risk insurance policy in Miami.
What Your Policy Covers
Builder's risk insurance isn't called the all risk coverage for nothing. Although your insurance policy won't actually cover everything (see the next section) it comes pretty darn close. The coverage area includes the property, any on-site buildings or structures, all construction areas, materials and building supplies- even while they are in storage areas or in transit. Risk coverage includes damages or loss due to fire, weather damage, and criminal activities such as material theft and property vandalism. Don't confuse construction tools and equipment with building materials, however, for coverage on these you'll need to purchase additional insurance.
What It Doesn't Cover
In Miami, contractor's risk insurance policy coverage does not extend to damage from major natural disasters such as earthquakes or floods, acts of international terrorism or war, or pre-meditated damage caused by the property owner or policy holder. It is important to note that builder's risk insurance only covers a new building project, from the date of construction start to the building project completion. Losses or damages that are incurred by the project before or after the construction period are not covered, and neither are building remodels, which fall under the general purview of commercial property or individual homeowner's insurance. Individual construction tools and equipment need to be covered separately.
Additional Coverage
While builder's insurance policies don't typically cover major natural disasters, you can purchase special coverage extensions for flood or earthquake damage, construction equipment and tool theft or vandalism, and indirectly related potential project costs or losses known in the industry as soft costs.
Getting Appropriate Coverage
To ensure that your building project gets the appropriate risk coverage, you will need to provide your contractor's risk insurance agency with comprehensive details on your particular project, including a professional cost analysis and estimate, construction documents such as blueprints, materials list, and the project schedule. Project risks are statistically assessed given the size, nature, and scope of the construction project, and any mitigating safety or security precautions should be disclosed to your insurance agent so that they may be duly noted and taken into account in your final policy coverage amount.
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