The Importance of Builder’s Risk Insurance

You know the importance of insurance to protect your business from risks associated with property ownership. However, you may not be aware that these policies do not provide adequate protection during the construction of a new building or remodeling project. Ohio Builder’s Risk insurance offers coverage for homes and businesses while they are under construction.

Who Needs Builder’s Risk Coverage?

Parties with an insurable interest in a property under construction may purchase this type of risk mitigation. A contractor, subcontractor, owner, or lender should consider getting a builders risk insurance quote for a new building project. Anyone with a financial investment in the structure can benefit from this kind of policy. The following people may want to have this coverage:

  • Lender
  • Contractor
  • Subcontractor
  • Architect
  • Property owner

What Does a Builders Risk Policy Cover?

Some policies are “all-risk” plans, meaning there are safeguards in place for everything that the policy does not explicitly exclude. Protection is only valid during the construction and ends once the building is complete. When you purchase this insurance for your project, it typically protects against damage from the following circumstances:

  • Fire
  • Hail
  • Theft
  • Vandalism

Further Protections

Every building project has unique needs and circumstances. In addition to property damage protection, an Ohio builder’s risk insurance policy may help pay for expenses related to the destruction, such as:

  • Lost sales
  • Added interest payments on loans
  • Real estate taxes
  • Rental income loss


You can find the right set of benefits for your needs by purchasing coverage extensions. These extensions may cover elements and losses, such as:

  • Scaffolding
  • Temporary structures
  • Debris disposal
  • Completion delays
  • Equipment testing
  • Faulty quality of work

What Are the Exclusions of Builder’s Risk Insurance?

Read your policy thoroughly to understand what the exclusions are. For example, earthquake damage is usually not a covered benefit. Often there are available add-ons you can purchase to cover excluded incidents. Discuss available choices with your insurance agent to determine the best coverage for you.

What Are the Typical Policy Terms?

These are specialized policies that only cover your financial interest in a current building project. Most builder’s risk plans start when you sign the construction contract. However, sometimes there are coverage restrictions, so make sure you understand the events that trigger your protection.

Most plans of this kind have three-month, six-month, or one-year terms. You can extend the policy if construction is still underway at the end of the period. These temporary policies typically have specific stipulations regarding coverage terms. The insurance company may connect your term conditions to the building’s completion or the date it becomes occupied.

It is easy to overlook potential coverage gaps when building a new structure. However, it is essential to be aware and obtain Ohio Builder’s Risk Insurance to protect your financial interest in the property.

About Haughn & Associates 

Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.