Builder's Risk Insurance
Builder's Risk Insurance in Memphis, TN
A building under construction is at its most exposed. Walls are open, lumber is stacked in the yard, and nobody is on site overnight. Builder's risk insurance in Memphis covers the structure and the materials while the work is underway, before a homeowners or commercial property policy can take over. Jones Enterprises Insurance Brokers helps property owners and contractors arrange this coverage for new builds and major renovations.
How Long Does a Builder's Risk Policy Last?
A builder's risk policy usually lasts for the length of the project, with terms commonly written for 3, 6, 9, or 12 months. You pick the term that matches your construction schedule. If the job runs long, most insurers will extend the policy for an added premium, as long as you ask before it expires. Coverage ends when the building is finished and occupied, sold, or put to its intended use, whichever comes first. At that point, a permanent property policy needs to be in place.
What the Policy Protects
Builder's risk is property coverage written for a job that changes every week. These are the parts that matter most.
The Structure Itself
The policy covers the building as it goes up, from foundation to roof. Typical covered causes of loss include fire, lightning, wind, hail, theft, and vandalism.
Materials On Site, in Transit, and in Storage
Lumber, windows, fixtures, and appliances waiting to be installed are covered while they sit on the job site. Many policies also cover materials on a truck headed to the site or stored at a separate location, often with a lower limit for those.
Renovations and Additions
Remodeling forms cover the new work on an existing building, like an addition or a gutted kitchen. Some also cover the existing structure during the project. Others leave that to the owner's current property policy, so check which kind you have.
Soft Costs
A covered loss can push back your completion date. Soft cost coverage, available on many policies as an add-on, pays expenses like extra loan interest, permit fees, and lost rental income caused by that delay.
What Builder's Risk Excludes
Faulty workmanship, wear and tear, and employee theft are usually excluded. Flood and earthquake often are too, unless you add them. Injuries on the job site fall under liability coverage, not builder's risk.
Setting Up Coverage for Your Project
Your limit should equal the completed value of the project: the full cost of labor and materials once the building is done, not counting the land. Getting that number right at the start keeps you from coming up short after a late-stage loss.
Builder's risk forms vary between insurers on transit limits, soft costs, and renovation terms. Our agents gather quotes from several insurers and walk you through those differences. Contractors usually pair this policy with general liability insurance for injury claims and inland marine insurance for the tools and equipment they bring to each site. The Jones Enterprises Insurance Brokers home page lists the rest of our personal and business policies.
Builder's Risk Insurance for Memphis Construction Projects
New homes in Bartlett, commercial build-outs in Germantown, and renovations across the river in West Memphis all need coverage from the day materials arrive. We arrange builder's risk for projects throughout the Memphis area. The agency also serves Nashville and Dallas, with business coverage available nationwide.
Common Questions From Builders and Owners
Should the owner or the contractor buy the policy?
The construction contract decides. Under the widely used AIA A201 general conditions, the owner buys the property insurance unless the contract says otherwise. On residential jobs, either the homeowner or the builder may carry it, so settle it in writing before work starts.
How is the coverage amount set?
It's based on completed value, the total cost of labor and materials for the finished structure. Land value isn't included. Some policies let you report values monthly as the building grows instead.
Are my tools covered?
No. Builder's risk covers materials that will become part of the building. Tools and equipment you bring to the site need a contractor's equipment policy, which is a form of inland marine coverage.
Can I insure a vacant building I'm renovating?
Yes, with a renovation form. Standard property policies often restrict coverage once a building has been vacant for 60 days, which is the gap a builder's risk policy for renovations is meant to close.
Is storm water damage covered?
Rain that enters through a roof opening created by wind damage is typically covered. Flood, meaning rising surface water, usually isn't unless you add it to the policy.
Before the First Delivery Arrives
Coverage has to begin before materials land on the site, not after. Call one of our friendly agents with your start date, project value, and expected finish, and we'll quote a policy that fits the schedule.