What Is Builders Risk Insurance and Why Do Colorado Contractors Need It?

Builders risk insurance is a specialized type of property insurance designed to protect buildings and other structures during the construction phase. It provides essential coverage for contractors in Colorado and other states, safeguarding their investments and mitigating financial risks.

Key Coverage Areas of Builders Risk Insurance: Protecting Against Common Construction Risks

A construction worker welding at a construction site, highlighting the importance of Builders Risk insurance for Colorado contractors.
Builders risk insurance is a crucial policy for Colorado contractors to safeguard construction projects.

Builders risk insurance typically covers a wide range of construction-related risks, including:

  • Physical Damage: Protection against physical damage to the structure, materials, and equipment caused by fire, theft, vandalism, windstorms, and other perils. This coverage ensures that if a construction site is damaged by a covered peril, the insurance policy will help cover the costs of repairs or replacement.
  • Construction Errors and Omissions: This coverage protects against financial losses resulting from errors, omissions, or faulty workmanship. If a mistake is made during construction that leads to damage or delays, this coverage can help mitigate the costs.
  • Delayed Opening: In the event of construction delays or interruptions, delayed opening coverage can help compensate for financial losses, such as lost rental income or increased operating costs.
  • Equipment Breakdown: This coverage protects construction equipment and machinery from damage caused by breakdowns, accidents, or other unforeseen events.

The Financial Impact of Not Having Risk Insurance for Colorado Construction Projects

Failing to have adequate builders risk insurance can have significant financial consequences for Colorado contractors. Without proper coverage, you could be personally liable for substantial costs related to:

  • Property Damage: If a fire, theft, or natural disaster damages the construction site, you may be responsible for the repair or replacement costs, which can be substantial, especially for large-scale projects.
  • Construction Delays: Delays caused by unforeseen circumstances, such as material shortages, labor strikes, or equipment failures, can lead to increased labor costs, material expenses, and potential penalties from clients or subcontractors.
  • Legal Liability: In the event of a construction accident or property damage, you may be held liable for damages and legal fees, which can be financially devastating.

By investing in a comprehensive builders risk insurance policy, Colorado contractors can protect their financial interests and mitigate the risks associated with construction projects.

Your business deserves the best protection. At Prince Insurance, we’re dedicated to providing exceptional insurance solutions and outstanding customer service. Contact us today to experience the difference.

Why You Need Builders Risk Protection

sillouhette of two men a construction platform.

After finally seeing your new home, office, or general property fully constructed, it’s a natural impulse to want to protect it from the elements with insurance – you don’t want something as simple as a flash flood to ruin what you’ve waited so long for.

But what about insurance for your property during its construction, as well?

Construction Risks and the Importance of Builders Risk Insurance

Although people tend to neglect insurance for their property during its construction, the reality is that properties are often more susceptible to damage during construction.

For example, a lack of complete coverings and security features makes properties being constructed much more susceptible to weather damage from wind, hail, or rain, as well as theft and vandalism.

This is why if you want to increase the chances of your property coming out exactly the way you imagined and save money in repair, replacement, and labor costs along the way, protecting it during construction with a Builders Risk policy is a very smart move.

A construction project filled with half built red platforms.
Given the in-progress nature of structures around construction sites, they’re much more susceptible to potentially dangerous elements like weather.

This type of policy can provide the following types of coverage:

  • Structural Coverage: Protects the buildings and other structures associated with the project.
  • General Liability: Protects the at-risk people working on the project.
  • Equipment & Materials Coverage: Protects the equipment and materials being used for construction.

Of course, these are simply the most common forms of coverage that go into most builders risk policies; what ultimately ends up being covered in your policy will depend on the needs and features of your specific project.

In some cases, you may need more comprehensive coverage, such as that found in contractor insurance or construction insurance.

Who Should Get Builders Risk Insurance?

Because of how many moving parts are typically involved in a construction project, it’s very normal for more than one name to be on a Builders Risk policy.

For example, while it’s most common for Builders Risk insurance to be taken out by those funding or managing construction, it’s also just as common for landowners, architects, engineers, and any other specialized professionals involved with the project to sign their names as well.

Getting Set Up with the Right Coverage

There’s no such thing as a one-size-fits-all Builders Risk policy. That is why it’s so important to prioritize working with insurance companies that understand not just how to protect construction properties, but that have enough expertise to be able to provide a tailor-made solution to your specific coverage needs.

Fortunately, these are exactly the types of policies that Prince Insurance Group can help you with.

To learn more about getting the perfect Builders Risk policy from professionals you can trust, contact Prince Insurance Group today.