Builders Risk Insurance Florida: Everything You Need to Know

As a builder, contractor, or property owner in Florida, it’s important to have adequate insurance coverage to protect your assets during construction. Builders risk insurance is designed to provide coverage for the building or structure being constructed, and any materials or equipment onsite during the construction period.

What is Builders Risk Insurance?

Builders risk insurance, also known as course of construction insurance, is a specialized form of property insurance that provides coverage for buildings or structures that are under construction or renovation. This type of insurance policy covers the structure, materials, and equipment on the construction site in case of damage or loss.

Builders risk insurance policies can be customized to fit the specific needs of the project, and typically cover the following types of losses:

Why Do You Need Builders Risk Insurance in Florida?

Builders risk insurance is essential for any construction project in Florida. Here are some reasons why:

• Protection for your investment: A builders risk insurance policy helps protect your investment by covering losses due to damage or theft of the building or materials on the construction site.
• Contractual requirements: Many construction contracts require builders risk insurance to be in place before the project can proceed.
• Potential legal issues: If someone is injured or their property is damaged as a result of the construction work, you could be liable for damages. Builders risk insurance helps protect you from legal liability.
• Peace of mind: Knowing that your investment is protected gives you peace of mind and allows you to focus on the construction project.

What Does Builders Risk Insurance Cover?

Builders risk insurance policies provide coverage for a variety of losses that can occur during construction. Here are some of the key items that can be covered under a builders risk insurance policy:

• Building or structure: This is the primary item covered under a builders risk insurance policy. Coverage is provided for the structure, including the foundation, walls, roof, and other elements.
• Materials and equipment: Builders risk insurance can also provide coverage for materials and equipment that are onsite during the construction period.
• Soft costs: Soft costs are expenses that are not directly related to construction but are necessary for the project to proceed. These can include architectural and engineering fees, legal fees, and permit fees. Builders risk insurance policies can provide coverage for these soft costs.
• Loss of income: If construction is delayed due to a covered loss, builders risk insurance can provide coverage for loss of income during the delay.
• Extra expenses: If a covered loss results in extra expenses, such as overtime pay or rental equipment, builders risk insurance can provide coverage for these expenses.

What is Not Covered Under Builders Risk Insurance?

While builders risk insurance provides coverage for a wide range of losses, there are some things that are typically not covered under this type of policy. Here are some examples:

• General liability: Builders risk insurance does not provide coverage for general liability or personal injury claims. A separate liability insurance policy is typically needed to cover these types of losses.
• Employee injuries: Workers’ compensation insurance is needed to cover injuries to employees on the job.
• Intentional damage: Builders risk insurance policies do not cover losses resulting from intentional acts, such as arson.
• Professional errors and omissions: Professional liability insurance is needed to cover losses resulting from errors or omissions in professional services, such as architectural or engineering services.

How Much Does Builders Risk Insurance Cost in Florida?

The cost of builders risk insurance in Florida can vary depending on a number of factors. These can include the size and scope of the project, the location of the construction site, and the level of coverage needed. Generally, builders risk insurance premiums are based on a percentage of the total construction cost.

As a general rule, builders risk insurance premiums in Florida can range from 1% to 4% of the total construction cost. For example, if the total construction cost is $500,000, the builders risk insurance premium may be between $5,000 and $20,000.

FAQs

Q: Who needs builders risk insurance?

A: Builders risk insurance is typically needed by anyone involved in the construction or renovation of a building or structure, including builders, contractors, and property owners.

Q: Is builders risk insurance required by law in Florida?

A: Builders risk insurance is not required by law in Florida, but many construction contracts will require it.

Q: How long does builders risk insurance coverage last?

A: Builders risk insurance coverage typically lasts for the duration of the construction project, up to a specified period of time (usually 12 or 18 months).

Q: Can builders risk insurance be extended if the construction project takes longer than expected?

A: Yes, builders risk insurance coverage can usually be extended if the construction project takes longer than expected. However, the extension must be requested prior to the expiration of the original policy.

Q: Are there any exclusions to builders risk insurance coverage?

A: Yes, there are certain exclusions to builders risk insurance coverage, such as intentional damage or losses resulting from faulty workmanship or design. It’s important to read your policy carefully to understand what is and is not covered.

Conclusion

Builders risk insurance is an important form of coverage for anyone involved in the construction or renovation of a building or structure in Florida. By providing coverage for the structure, materials, equipment, and other items onsite during the construction period, builders risk insurance helps protect your investment and provides peace of mind.