Builders Risk Insurance in Texas

What is builders risk insurance? 

Construction projects often encounter unforeseen challenges, which can lead to delays or even stopping a project altogether. Builders in Texas can face potentially serious financial liability if this happens, which is why builders risk insurance is important.

Builders risk insurance provides specialized coverage for ongoing construction projects. If a project experiences delays or stoppage, policies might cover the resulting liability costs.

What businesses in Texas should purchase builders risk coverage?

Texas construction companies engaged in large projects may want builders risk coverage. The larger the project and more possible challenges, the more important coverage becomes.

In many cases, companies that work in commercial construction must have builders risk. Businesses and commercial property owners might only award contracts if the coverage is in place, as a means of protecting themselves against potential incompletion. Lenders too might require a builders risk policy when financing a project.

What assets are protected under builders risk policies? 

Builders risk policies may cover equipment, supplies and work completed to date. Coverage is normally limited to a job site, only protecting equipment and supplies when they’re at the site.

Coverage is broadly available for most assets that construction companies would have on-site. While specific protections can vary, policies often provide protection for:

• Structures under construction
• Completed structures
• Major equipment and machinery
• Common and specialized tools
• Supplies and materials 

In particular, coverage for ongoing and completed structures can vary. An insurance agent knowledgeable in builders risk can check what structures a particular policy would cover.

What sorts of construction projects can be insured with builders risk coverage?

Builders risk coverage is available for most large-scale commercial construction projects. For example, policies can usually be purchased for:

• Apartment buildings
• Sub developments
• Gated communities
• Retail stores and centers
• Office buildings
• Industrial facilities
• Warehouses
• Public infrastructure
• Other large projects

Sometimes construction companies get policies for major renovations to an existing structure, and even occasionally extensive landscaping or hardscaping work.

Again, an insurance agent specializing in builders risk can check what projects a particular policy is able to cover.

Is builders risk coverage available for single-family home construction? 

Builders risk policies are mainly for larger residential projects, and aren’t commonly used for the construction of freestanding houses. If coverage for individual home builds is required, this is something that a specialized insurance agent can likely assist with.

Which perils are covered by builders risk coverage? 

Builders risk policies can cover a variety of perils. Depending on a policy’s terms and protections, it could protect against adverse weather conditions, water damage, fire and smoke, vandalism, theft, and other specified threats.

Can policies be extended if there are construction delays? 

Minor delays won’t necessarily warrant an insurance claim against a builders risk policy, but they could make construction extend beyond a policy’s termination date. 

In these situations, many builders risk policies can be extended one time without many problems. Additional extensions might require a new policy, however, and some may not have a provision allowing an extension at all.

How much does builders risk coverage cost? 

The cost of builders risk insurance is determined by various factors, including the project’s scope, size and location, equipment used, and overall cost. 

Construction companies can find out how much coverage will cost for a specific project by comparing policy options with an independent insurance agent.