A New Jersey Builders Risk Policy is insurance that provides coverage for buildings that are currently under construction. The project can be a new structure, or a remodeling job or repairs made to a damaged building. Coverage includes all materials at the work site related to the job before they are installed, any materials intended to be used at the work site that are still in transit, and the value of the new, remodeled, or repaired property being built until it’s completed and the owner signs off on the completed work.
Builders risk insurance coverage can also be purchased for specific home improvement projects such as a remodeled kitchen, a new deck, or a room addition. This policy has considerable value, especially in situations where building materials and equipment is at risk. Those who can benefit by purchasing a New Jersey Builders Risk Policy include general contractors, subcontractors, homebuilders, home renovators, real estate developers, building owners, colleges and universities, and municipalities.
What exactly does the policy cover?
A builders risk insurance policy includes perils such as theft, vandalism, fire, windstorm, lightning, and hail. Most policies also offer limited coverage in the event that the structure collapses during construction. Standard exclusions include earthquake, flood, and any weather damage to property in the open, water damage, employee theft, mechanical breakdown, war, government action, contract penalty, and voluntary parting.
Another important exclusion is for damage resulting from faulty design, planning, workmanship and materials. Builders risk insurance is meant to offer coverage for accidental events and not for issues concerning poor construction. Earthquake and flood coverage can usually be added to the insurance policy for an additional cost.
Who is insured?
The named insured of a New Jersey Builders Risk Policy is usually the contractor or developer of the property. However, it may be the building owner or homeowner if they are responsible for insuring the property while under construction, particularly in cases where the construction is a remodel or repair of an old structure. A mortgagee or lien holder may be added as an additional insured. Speak to an agent regarding any questions about this important coverage.