Builders Risk Insurance is a vital component of any construction project, providing essential coverage against a variety of risks. However, there are several misconceptions about this type of insurance that can lead to confusion and, ultimately, inadequate protection. In this blog post, we’ll debunk the top five common misconceptions about Builders Risk Insurance and set the record straight.

1. Builders Risk Insurance is the Same as General Liability Insurance
   One of the most common misconceptions is that Builders Risk Insurance and General Liability Insurance are the same. While both types of insurance are crucial for construction projects, they serve different purposes. Builder’s Risk Insurance specifically covers damage to the building and materials during construction, while General Liability Insurance covers third-party claims for bodily injury or property damage arising from the construction activities.
   
2. Builders Risk Insurance Only Covers Completed Structures
   Another misconception is that Builders Risk Insurance only covers the structure once it is completed. In reality, Builders Risk Insurance is designed to protect the building throughout the entire construction process, from the initial groundbreaking to the final touches. It covers damage to the building, materials, and equipment used on-site during the construction period.
   
3. Builders Risk Insurance Covers All Types of Damage
   While Builders Risk Insurance provides comprehensive coverage, it does not cover all types of damage. Common exclusions include damage caused by earthquakes, floods, and employee theft. Additionally, standard Builders Risk policies may not cover tools and equipment owned by contractors. It’s essential to review your policy carefully and consider purchasing additional coverage for specific risks not included in the standard policy.
   
4. Builders Risk Insurance is Only Necessary for Large Projects
   Some people believe that Builders Risk Insurance is only necessary for large-scale construction projects. However, this type of insurance is equally important for smaller projects, such as home renovations or small commercial developments. Any construction project, regardless of size, is vulnerable to risks like fire, theft, and weather-related damage. Builders Risk Insurance provides peace of mind and financial protection for projects of all sizes.
   
5. Builders Risk Insurance is Too Expensive
   Many assume that Builders Risk Insurance is prohibitively expensive. While the cost of coverage can vary depending on factors like project size, location, and duration, Builders Risk Insurance is often more affordable than people realize. Considering the potential financial losses from damage or delays during construction, the investment in Builders Risk Insurance is well worth the cost. Additionally, working with an experienced insurance agent can help you find the best coverage options within your budget.

Ermitage Risk is your trusted partner for Builders Risk insurance. We look forward to discussing your project with you! You can reach us at (970)-725-6683 or at info@ermitagerisk.com.