Marc Flood, CIC, LUTCF September 26, 2016 3 min read

Builder's Risk  - I’m Covered, Right?

Whether you are a developer, owner, or contractor, a properly structured builder’s risk program is essential to the success of your project.

builders risk insurance

What do you do when you are going to construct a building and the bank requires a builder’s risk policy to be in place? Most people call their insurance agent.  The agent then asks, “What is the value of the building?”  After a couple of days the agent calls back and says, “The policy will cost X amount.” 

You are all set, right?

Actually, you may not be all set in the event of a significant loss. There are many components that can make up a builder's risk program.

For example:

  • If your project is three quarters finished and you have a loss, did you have leases signed with tenants to begin occupancy on a specific day? What happens to those tenants when they cannot move in on time? Typically they go somewhere else. Will the loss of those tenants cost you financially? Most likely, yes.
  • When there is a significant builder’s risk loss, the first thing you will need to do is clear the site to begin reconstruction. Does your policy provide adequate dollars to clean up and start fresh? If not, then this cost comes out of your pocket.
  • Have there been any regulatory changes that have come into effect since your initial construction start date that you now have to account for in your reconstruction? Will you have to pay an architect or engineer to redesign your project to accommodate these changes?
  • Building materials will be either stored at the site or off site. Does your policy cover these materials while they are in storage?

You can suffer a significant loss due to not being adequately insured while your building is under construction. At Hausmann-Johnson Insurance, we understand this.  We will adequately structure a builder’s risk program that protects you and your assets. Contact the Construction Group of trusted advisors at Hausmann-Johnson Insurance to find out more about builder's risk.


Marc Flood, CIC, LUTCF

Marc has been a commercial agent with Hausmann-Johnson Insurance since 1995 and during that time he has enjoyed building strong relationships with clients. Through those relationships he also builds trust, which he recognizes as an important measurement of a successful agent. Marc also embraces being a problem-solver for clients who may be facing claims, coverage or premium related issues. Marc enjoys spending his free time with his family either at athletic events or on a boat at the lake. Giving back is also important to Marc as he actively volunteers with the Salvation Army, Operation Fresh Start, and the River Food Panty