Builder Risks Insurance in North Carolina

Builder's Risk Insurance, also known as Course of Construction Insurance, is a specialized type of property insurance. It's designed to protect buildings and structures that are under construction or renovation. In North Carolina, as in other states, this insurance is crucial for anyone involved in the construction industry. In this comprehensive guide, we will delve into the specifics of Builder's Risk Insurance in North Carolina, including its importance, coverage, exclusions, and how to obtain it.

Builder's Risk Insurance typically covers the building under construction, materials, and equipment. However, the specifics of what is covered can vary depending on the policy and the insurer. Let's delve into the details.

Building and Structures

The primary coverage of Builder's Risk Insurance is for the building or structure under construction. This includes the cost of repairing or replacing the building if it's damaged by a covered peril, such as fire or windstorm.

It's important to note that the policy should cover the full value of the completed building. This means that as the construction progresses and the value of the building increases, the policy limit should be adjusted accordingly.

Materials, Fixtures, and Equipment

Builder's Risk Insurance also covers materials, fixtures, and equipment used in the construction. This includes materials in transit to the construction site and stored at the site. If these items are stolen or damaged by a covered peril, the policy will cover the cost to replace them.

Some policies may also cover temporary structures, such as scaffolding and construction forms. However, this coverage is not standard and should be specifically included if needed.

While Builder's Risk Insurance provides extensive coverage, it's not all-encompassing. There are certain exclusions that are typically not covered by the policy. Understanding these exclusions is crucial to ensure that you have adequate protection for your construction project.

Standard Exclusions

Most Builder's Risk Insurance policies exclude losses from certain perils, such as earthquakes, floods, and acts of war. These exclusions are standard in most property insurance policies and are not unique to Builder's Risk Insurance.

However, coverage for some of these excluded perils can often be added for an additional premium. For example, if your construction site is in a flood-prone area, you may want to consider adding flood coverage to your policy.

Professional Liability

Builder's Risk Insurance does not cover professional liability. This means that if a loss occurs due to errors in design, planning, or workmanship, the policy will not cover it. For this type of coverage, you would need to obtain a separate professional liability insurance policy.

Similarly, the policy does not cover losses due to faulty materials. If a loss occurs because the materials used in the construction were defective, the policy will not cover it.