In order to thrive in the construction business a contractor must first, win bids and second, deliver the goods. Doing a good job means bringing in more money but it also comes with risks and exposures associated with this line of work. For those whose primary source of income is in home building and restoring projects, residential construction insurance in New Jersey will provide some much needed relief when an issue arises.
Make no mistake; the first item on any contractors list will be insurance on the property while under construction. Typically, the coverage purchased by most professionals is Builder’s Risk Insurance, a specialized coverage designed specifically to apply to buildings while under construction, which includes materials and supplies pertaining to the construction. There are other possible options for coverage of items not covered under a builders risk policy.
Who buys this coverage?
Depending on the terms of the construction contract, this particular coverage may be purchased by either the contractor or the owner of the building. In either case, all parties to the project who may have property involved in the construction should be named in the policy. This usually includes the owner, the contractor, any subcontractors, any sub-subcontractors employed by the subcontractors, the financial institution supplying money for the project, and also any architects and engineers involved in the project.
What does builder’s risk cover?
A builders risk policy provides coverage for damage done to the insured structure from a number of possible events. Most policies will cover damage from fire or theft, as well as any of the following events; wind, lightning, hail, and explosions. Extensions of coverage may be provided for certain exposures not listed here.
For example, property in transit, that is, any resulting property loss while said property is being transported to the jobsite. Coverage can also be extended to apply to scaffolding, construction forms and any temporary structures, but only while they are at a location reported to the insurer. Any property in temporary storage that will be used or installed in the secured location and pertaining to the insured company can also be covered under an extension to existing coverage.
A contractor will need to purchase a separate policy to cover the property of others; tools or equipment, any liability issues or concerns, including accidents on the job site, and sub-contractors are, in most instances, required to have their own insurance. Speak to an agent about any questions or concerns pertaining to New Jersey residential construction insurance today.