Andrew Troi
I have had an incredible experience with Harrison Insurance and Jennifer in particular. She is true professional and handles all questions and concerns in a timely and kind manner. I’m so glad I switched my auto and renters policy to Erie and Harrison insurance.
Andrew Troi
2024-04-06
Kayla Courtois
Fantastic customer service! Very knowledgeable, patient, and friendly. We were a new business starting up with absolutely NO clue what to do. Fred made the process very simple and got us the coverage we needed in a field that is hard to get coverage in!
Kayla Courtois
2024-03-22
Thomas Sweeney
Used Fred for my executor bond, he worked with me over the phone as I was out of town to fill out the paperwork. The prices were much cheaper than anywhere else I found.
Thomas Sweeney
2022-12-27
bryan acheson
Fred and team at Harrison Insurance are awesome. I requested a review of my insurance coverage for my business and found that I was grossly under covered. Fred explained where I was needing additional coverage and why it was important. Needless to say, I'm now a client. Fred truly cares for his clients. I think my premiums basically stayed the same, for additional coverage I might add, but I would have been willing to pay more just for the service and knowing I was being taken care of. I highly recommend Fred for your business.
bryan acheson
2022-03-04
Kayla Furrow
Harrison Insurance is a great company to work with! I worked with Fred and the personal touch he adds makes you feel like you’re truly being taken care of, like you’re a part of the family. Fred never settles for the bare minimum, and if he sees something lacking in your insurance policy, he will tell you what he can do to fix it and what kind of options you have to make sure you’re covered in every area possible. Harrison Insurance is a small town agency, but their impact is huge. If you’ve got any kind of insurance, it is always worth giving Harrison a call and seeing where you can improve your coverage while lowering your rates. You definitely won’t regret touching base with them!
Kayla Furrow
2022-01-11
Wes Tatum
Highly recommend this company. Fred Zehrer was my agent and he provided top notch service. The process was simple and Fred saved me over $600 a year on my business vehicle insurance. I can't say enough good things about Fred and Harrison Insurance. If you want peace of mind and fair prices, this is where you need to be.
Wes Tatum
2016-09-07

Who Pays for Builders Risk Insurance?

Builders Risk Insurance

Who Pays for Builders Risk Insurance?

In the realm of construction, risk is a constant companion.

Builders Risk Insurance serves as a shield against this inherent uncertainty.

But who bears the financial responsibility for this protective measure?

This question is particularly pertinent in Virginia, where construction projects abound.

In this article, we delve into the intricacies of Builders Risk Insurance.

We aim to clarify who pays for it, especially within the context of Virginia’s unique landscape.

Understanding Builders Risk Insurance

Builders Risk Insurance is a specialized type of property insurance.

It is designed to protect buildings and structures that are under construction or renovation.

This insurance covers the structure itself and the materials used in its construction.

It also extends to equipment and supplies on-site or in transit.

The policy is typically purchased by the owner or contractor before construction begins.

However, the financial responsibility can vary depending on the project’s specifics.

Key aspects of Builders Risk Insurance include:

  • Coverage for damage due to fire, wind, theft, and vandalism.
  • Protection for materials, supplies, and equipment.
  • Coverage for soft costs like lost sales and rental income.
  • Potential for coverage extensions for specific risks.

The Purpose and Scope of Builders Risk Insurance

The primary purpose of Builders Risk Insurance is to safeguard the investment in a construction project.

It provides financial protection against unexpected losses that could derail the project.

The scope of coverage is broad, encompassing a wide range of potential risks.

However, it’s important to note that not all risks are covered.

Certain exclusions may apply, such as damage due to poor workmanship or design flaws.

Coverage Nuances in Virginia Builders Risk Insurance

In Virginia, Builders Risk Insurance has its unique nuances.

The state’s diverse geography and climate can influence the risks a construction project faces.

For instance, coastal projects may require additional coverage for flood or hurricane damage.

Similarly, projects in urban areas may need enhanced protection against theft or vandalism.

Understanding these nuances is crucial for ensuring adequate coverage in Virginia.

Financial Responsibility for Builders Risk Insurance

Determining who pays for Builders Risk Insurance can be complex.

It often depends on the specifics of the construction project.

Typically, the person or entity with the most financial interest in the project purchases the policy.

This could be the property owner, the contractor, or even a lender or investor.

The cost of the insurance is often factored into the project’s overall budget.

In some cases, the cost may be split among multiple parties.

It’s crucial to clarify this responsibility in the construction contract.

Misunderstandings can lead to gaps in coverage and financial losses.

Property Owners and Builders Risk Insurance

Property owners often bear the responsibility for Builders Risk Insurance.

They have a vested interest in protecting their investment.

The insurance provides financial protection against potential losses during construction.

However, the owner may pass on the cost to the contractor in the contract terms.

This arrangement should be clearly outlined and agreed upon by all parties.

Contractors’ Obligations in Builders Risk Insurance

Contractors also have a significant role in Builders Risk Insurance.

They may be required to purchase the policy as part of their contract.

This ensures that they have adequate coverage for their work and materials.

However, contractors should be careful not to assume liability beyond their control.

The contract should clearly define their responsibilities and limits.

Lenders and Investors: Their Role in Builders Risk Insurance

Lenders and investors may also require Builders Risk Insurance.

This is especially true for financed projects.

The insurance protects their financial interest in the project.

They may require the borrower or developer to purchase the policy.

In some cases, they may even be listed as additional insureds on the policy.

Legal and Contractual Considerations in Virginia

In Virginia, there are specific legal and contractual considerations for Builders Risk Insurance.

The state’s laws and regulations may influence who is responsible for purchasing the policy.

The construction contract should align with these legal requirements.

It’s crucial to consult with a knowledgeable insurance agent or legal counsel.

They can provide guidance on Virginia’s specific requirements and best practices.

Virginia’s Legal Requirements for Builders Risk Insurance

Virginia law does not specifically mandate Builders Risk Insurance.

However, it’s often required by lenders, investors, or contractual agreements.

Understanding these requirements can help avoid legal disputes and financial losses.

The Distinction Between Builders Risk and General Liability Insurance

Builders Risk Insurance is distinct from General Liability Insurance.

The former covers property damage during construction, while the latter covers third-party injury or property damage claims.

Both types of insurance are crucial for comprehensive protection during a construction project.

Assessing and Managing Risk in Construction Projects

Risk assessment is a critical part of any construction project.

It involves identifying potential hazards and implementing measures to mitigate them.

Builders Risk Insurance plays a key role in this process.

It provides financial protection against unforeseen events that could lead to property damage.

Proper risk management can help ensure the successful completion of the project.

Determining Policy Limits and Coverage Duration

The policy limit of Builders Risk Insurance should reflect the total value of the construction project.

This includes both hard costs (materials, labor) and soft costs (permits, architect fees).

The coverage duration typically lasts until the project is completed and the property is ready for use.

The Role of Insurance Agents and Brokers

Insurance agents and brokers can provide valuable assistance in procuring Builders Risk Insurance.

They can help determine the appropriate coverage limits and policy duration.

Moreover, they can assist in comparing quotes from different insurers to find the best deal.

Conclusion: Ensuring Adequate Protection for Your Construction Project

Builders Risk Insurance is a crucial component in safeguarding your construction project.

By understanding who bears the financial responsibility and the specific considerations in Virginia, you can ensure adequate protection and smooth project execution.

Share