why builders risk coverage?
Ermitage Risk is your trusted advisor for residential and commercial builders risk insurance. We focus on high-value residential construction and complex commercial projects in Colorado and Arizona.
We have a legacy in creating tailored and cost-efficient insurance solutions that deliver when it matters. We rely on our long-standing experience and significant insurance industry network to access the best insurance coverage for any project.
Builders Risk Insurance offers protection for new construction, remodeling, and renovations of both residential and commercial buildings against fire, vandalism, theft, collapse and much more.
Who Needs
Builders Risk
Insurance?
Builder’s risk insurance is essential for:
- Property owners
- Builders, contractors, subcontractors
- Developers
- Lenders and financial institutions involved in construction projects
Lenders and mortgage holders often require you to carry builders risk insurance to protect their interest.
The policyholder varies depending on who is developing the property and can be any of the parties involved. We recommend that the party with the biggest financial interest in the project is listed as the policyholder. This can be different for every project and for residential or commercial construction.
Oftentimes, several parties will be added as listed insureds to protect their interests during the construction. All for a single policy premium.
Unique Risks During Construction Projects
Whether in city, suburban or rural settings, all construction projects face unique challenges that will impact a successful completion:
THEFT
VANDALISM
WILDFIRE
PROPERTY DAMAGE
ARSON, FIRE OR LIGHTNING
Builders Risk insurance can help mitigate these risks so you can focus your attention on the successful completion of the project. Having a proper understanding of your construction project’s specific risks can further help to mitigate any potential roadblocks and ensure successful delivery!
When to start coverage
It is best to obtain builders risk insurance before you start construction. The saying goes in insurance that you can’t insure a building that’s on fire! It will be difficult to find an insurer willing to provide coverage for any project that’s past 30% completion.
Policy periods can range from 3-12 months. Both the beginning and end of the policy period are important aspects to consider in order to avoid coverage gaps and a seamless transition to homeowners insurance once the building is finalized. We at Ermitage Risk are ready to help you with these aspects.
“We had a delivery for high-end appliances arrive on Friday to be installed the Monday after. When we arrived on Monday morning, someone had driven a box truck backwards into our new garage and part of the structure collapsed. Of course, all appliances were gone – a value of $50,000. The insurer paid to replace the stolen appliances plus the repair of the new garage.”
Builders Risk vs. Homeowners insurance vs. Commercial Property policies
A building under construction has very different risks and exposures (theft, vandalism, fire, collapse, etc.) than a finished building that’s sealed to the elements, is occupied by its owners or tenants and has proper heating, electrical and utilities. That’s the reason why insurance companies offer different policies for buildings under construction than for finished and occupied buildings.
Homeowners and Commercial Property policies both tend to exclude a multitude of exposures associated with construction, renovation or remodeling.
A homeowners policy is not an adequate protection for construction-related risks. Most policies exclude new construction and remodeling, as well as elements such as the (unfortunately frequent) theft of materials that are not yet “built in” to the existing structure. Examples are appliances that are not hooked up yet and the Italian marble tiles that cost 150k but vanished overnight. There are often strict vacancy provisions which will serve as the basis for excluding most construction-related claims under a homeowners policy.
Some agents will propose you sign a homeowners policy with them before you start construction and “confirm” it will cover you during the construction phase. Our experience is that it won’t.
Make sure to give us a call and let us be your trusted advisor for builders risk insurance.
Please reach out to us and we’ll do a free coverage comparison for you to help your decision-making!
Most commercial property policies have strict exclusions regarding new construction, additions and remodeling, coupled with strict vacancy protections. In addition, if you’re installing any equipment such as boilers, air conditioners, elevators, trash compactors, etc., you will need specific construction forms to be added in order to be adequately covered.
Many businesses believe their contracts are strong enough to transfer any construction risks onto their contractors and their subcontractors. Yet that would require you to understand their insurance policies because they often own nothing more than a truck and a few tools.
Is your current office or retail tenant moving walls to create more space and moving electrical and water lines? Their policy is most likely a contents-only policy and will not cover any damages they or their contractors cause to your building.
Please reach out to Ermitage Risk so we can be your trusted advisor regarding builders risk. We are happy to discuss your specific risks, including how to handle your contractors and subcontractors.
What is Builders Risk Coverage – the technical aspects
Most commercial property policies have strict exclusions regarding new construction, additions and remodeling, coupled with strict vacancy protections. In addition, if you’re installing any equipment such as boilers, air conditioners, elevators, trash compactors, etc., you will need specific construction forms to be added in order to be adequately covered.
Many businesses believe their contracts are strong enough to transfer any construction risks onto their contractors and their subcontractors. Yet that would require you to understand their insurance policies because they often own nothing more than a truck and a few tools.
Is your current office or retail tenant moving walls to create more space and moving electrical and water lines? Their policy is most likely a contents-only policy and will not cover any damages they or their contractors cause to your building.
Please reach out to Ermitage Risk so we can be your trusted advisor regarding builders risk. We are happy to discuss your specific risks, including how to handle your contractors and subcontractors.
“Our project manager was called to the site at 9pm on Saturday to meet the sheriff’s deputy. A group of teenagers broke into the construction site. One of them broke his spine after he moved a barricade in the dark and fell into an unfinished elevator shaft. Now we are getting sued for $3 million to cover his medical cost and may face punitive damages for our alleged lack of safety features even though we strictly follow OSHA guidelines.”
There are a variety of Builders Risk policy wordings with each their specific add-ons:
Single project policies
Usually applicable to custom residential homes and large or complex commercial projects.
Multi-project policies
Usually applicable to tract homes or large residential developments.
At Ermitage Risk, we focus on making sure all representations made on the insurance application are correct and thoroughly documented. This will be paramount for a successful collaboration with the insurer in the case of a claim.
There are many more important aspects to Builders Risk insurance that we’d like to discuss with you. Please reach out to us for a coverage discussion!
The Right Partner – Ermitage Risk
It is important to work with an experienced independent agent that understands how to protect construction projects and will spend the necessary time seeking out the right coverage options for you and at the right price.
At Ermitage Risk, we are entirely focused on providing the best and cost-efficient Builders Risk insurance options for you. We do not sell Builders Risk as an add-on.
We look forward to discussing your project with you!
Your Project. Insured.
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Ermitage Risk is your trusted advisor for Builders Risk insurance. We are looking forward to discussing your project with you and lead you through the many complex aspects of construction insurance to find the right coverage.
Given the size and importance of the projects we work on, we typically start the application process with a call about your project aimed at fact-finding. You are welcome to bring your lawyer to the conversation as well:
- Project owners, Homebuilder, General contractor, other stakeholders
- Project plan and timelines
- Location, high-level understanding of risks and exposures
- Budget
The timelines for a quote will vary depending on project size, exposures and mandate. Some quotes can be provided within a 24-hour timeframe. Larger projects may take up to two weeks to complete a quote and get commitment from insurance companies.
To get the process started, please give us a call at 970-725-6683 or use our contact form.
You can also enter your project information in the form below to get started and we’ll reach out to you within a few hours.
How We Work with you and your team:
Project Risk Assessment:
We work with your team (generally the homeowner, architect, general contractor, etc.) to assess your building project and identify your specific construction risks.
Quote for Insurance Coverage:
Based on our initial assessment, we will work with our insurance carrier partners to find appropriate coverage and provide a cost-effective insurance solution.
Implementation and Monitoring:
Once all parameters are agreed, we’ll work out a plan on how to mitigate any risks during the construction phase, identify best practices and make sure these are followed. We will help your team understand which resources must be available onsite as agreed, such as wildfire mitigation, onsite water resources, security, and so forth.
Transition to occupancy of the building:
As the final phase of the project approaches, we will ensure a seamless transition to Homeowners insurance coverage to avoid coverage gaps once your building is final and occupancy starts.
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CONTACT US
Ermitage Risk LLC
1942 Broadway
Suite 314C
Boulder, CO 80302
Office Phone: (970)-725-6683
OFFICE HOURS
Mon-Fri: 8:00am-6:00pm
Sat-Sun: Closed. Available for site visits