Construction is a complex process that carries a tremendous cost and involves many components. The cost may be even further impacted if there are delays during construction due to a particular loss or any damages occurring to any component or member of the crew. This points out just a few of the obvious reasons why it’s important to make sure that you purchase New Jersey construction insurance in the form of builder’s risk.
Even with the best planning, and proper safety measures in place and observed, accidents may still happen over the course of a project. Due to the work involved, construction presents a much greater risk than those existing in other businesses and you can only benefit by finding great coverage to keep both your building and your equipment protected.
Builder’s risk policy: what is and isn’t covered
Acting as a form of property insurance, builder’s risk insurance provides a protective cover to shield contractors from a costly financial situation should the building sustain a loss such as fire, wind damage, or an “act of God.” It covers everything from the theft of items, for example, stolen copper piping or appliances, and vandalism or accidental property damage.
Similarly, equipment coverage insures your tools and machinery, which you’ll find aren’t normally protected under a builder’s risk policy. Without the proper builder’s risk insurance coverage, just one lawsuit could financially drain a company, a risk that no one should be willing to take.
Ensuring that you have the needed coverage in place
In a conversion, if something happens to the property mid-construction, most policies will only cover the actual cash value of the building and not the replacement cost. This is another reason it’s important to not only read the policy, but also understand the policy language. For new construction projects, you need to make sure that in addition to the structure being covered, the scaffolding, the pipes in the ground, and other items essential to the job are as well.
Policies can be purchased that cover the owner and contractors, and you may also need to cover subcontractors and materials suppliers. These are the things to consider when purchasing New Jersey construction insurance, or a builder’s risk policy. It is important to work with a knowledgeable agent, as it can be a very complicated process, and you’ll want to make sure that you get the right coverage.