Construction projects, whether new developments or remodels, are often time-consuming projects fraught with risks along the way. These risks are sometimes called builder’s risk and protected against through a special form of liability insurance. However, it isn’t just the builder who is worried about potential losses during the building project. The project owner and any other contractor involved may wish to take out specific insurance during construction.
A builder’s risk policy, also known as COC insurance, is temporary coverage that takes the place of a traditional property liability policy like homeowners’ insurance. This coverage is usually required in order to meet contractual arrangements from a lender or to comply with government regulations. Protections under this coverage include insurable interests in:
The policy type, with the limits and proper coverage, should be adequate to cover potential losses in the event of damage or physical loss from a covered cause. This policy type would generally include theft of materials once the supplies have been left at the job site, and some protections extend to the transport and temporary storage of building materials during the course of construction.
Understanding the liabilities that threaten a building project makes it easier to establish needed coverage against those risks. Under a COC policy, the prime threats that would delay a project are addressed.