What is builders risk insurance and does US Assure write it in Georgia?
Builders risk insurance covers a building while it is under construction or renovation. It is a temporary policy, it exists for the life of the project and typically expires when the work is complete and the structure is ready for occupancy.
What does builders risk insurance cover during construction?
A standard commercial or homeowners property policy covers a completed, occupied building. Once a project is underway, that coverage does not extend to the structure being built. The materials stockpiled on site, the framing going up, and the mechanical rough-in work already in place are all exposed to fire, wind, theft, vandalism, and weather damage. Builders risk fills that gap.
Coverage typically attaches to the structure itself, materials stored on the project site, and in many cases materials in transit from a supplier to the jobsite. Most policies are written on an open perils basis, meaning losses are covered unless a peril is specifically excluded.
What does a builders risk policy exclude?
Common exclusions include:
- Earthquakes
- Floods
- Employee theft
- Faulty workmanship
A separate flood policy or inland marine endorsement can address some of those gaps, depending on the program.
For example, a new home under construction in a FEMA-designated Special Flood Hazard Area near the Chattahoochee River would not receive flood coverage under a standard builders risk policy. The contractor or owner would need a separate flood policy or a program that includes a flood extension to protect materials and the structure against rising water during the build.
How is a builders risk policy valued?
Policies are usually written for the projected completed value of the project, not the current stage of construction. That value should reflect the full replacement cost once work is finished, including materials and labor. Underinsuring a project is one of the more common mistakes. If a loss occurs mid-build, a policy limit based on a partial-completion estimate may not cover the full cost to restore what was destroyed.
For example, if a custom home is projected to cost $800,000 to complete but is only insured at $400,000 because the limit was set to the current framing stage, a fire that destroys the partially built structure leaves a $400,000 gap that the owner must fund out of pocket.
Who purchases builders risk coverage on a Georgia construction project?
Builders risk is typically purchased by the property owner, the general contractor, or both, depending on the contract language. Whoever has an insurable interest in the project during construction needs to be covered. Subcontractors generally do not carry their own builders risk; they rely on the general contractor or owner policy. However, subcontractors do need their own general liability coverage regardless.
Does US Assure write builders risk in Georgia?
US Assure is a program administrator that specializes in builders risk coverage and writes this coverage in Georgia. US Assure programs are available through Olive Cover, which means clients working with Olive Insurance Services, LLC can access this market for new construction, remodels, and renovation projects of varying sizes and types.
Not every project fits a standard program. High-value custom homes, mixed-use commercial builds, and projects with complex timelines may require manuscript terms or a different market altogether. A coverage review can confirm which program fits your project and what limits and endorsements make sense given the scope of work.
Schedule a coverage review to get builders risk placed for your construction project in Georgia.