Designed to protect construction projects that are in progress along with tools and equipment on the job site, course of construction coverage helps protect you from financial losses caused by natural disasters, vandalism, theft, fires, or even pandemics like COVID-19.
Also called builders risk insurance, the short explanation of what this policy does for your construction business is simple:
It protects your business' investment in an active construction project.
Course of Construction Has You Covered
Taking out a course of construction policy on an active project helps protect you from losses if something happens on a job site before the project is finished.
Course of construction insurance is designed to offer protection for commercial and residential projects undergoing major reconstruction and new builds. Save this policy for your big projects - it’s not meant for small repairs.
A course of construction policy is intended to cover everyone who is working on a project. The single policy is typically obtained by a single party - such as the project owner, developer, or general contractor. All subcontractors and other interested parties are included as “named insureds”.
This ensures all parties are protected and can avoid complicated issues and finger-pointing should the unexpected occur during a build.
Protection Against Losses From Vandalism and Theft
Course of construction insurance helps with the cost of losses of your construction business' materials, supplies, tools, and equipment on the covered project.
Everything from hammers and backhoes to scaffolding and site plans may be covered under a course of construction policy. Should you suffer big losses on the project – such as a new build being burnt to the ground by arsonists – a course of construction policy can help cover the costs for clean-up, replacement supplies, and the time it will take to rebuild what was lost.
Should that fire consume your work materials and tools, they will be covered under your course of construction policy, as well.
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Protection From Accidents and Natural Disasters
Unfortunately, active projects are not immune to unforeseen incidents. Never knowing when and if disaster could strike, you should always have a ‘better safe than sorry’ attitude when it comes to your business’ investment in a project.
Unforeseen perils typically covered by a course of construction policy include:
- Impact by aircraft or vehicles
- Windstorm, hail, and rain
Course of construction insurance may be your best bet to protect your project against pandemics like COVID-19, as well. Most course of construction policies are all-risk based, meaning the only exceptions to coverage are those explicitly excluded in the policy. Unless your policy specifically excludes "virus" or "pandemic," then this policy could help protect you if you incur additional costs from government-mandated shutdowns or delays.
How Does Course of Construction Policy Work
When you take out a course of construction policy, it is designed to cover your project during the construction phase only. Once the build ends, coverage ends.
While your best intentions for a project could be a completion date 3 months out, things can come up that complicate your project and push the end-date out.
Don't worry - you don't have to be able to predict the future to take out a policy. Give your best estimate for a completion date and then extend coverage as necessary.
Tending to have very few exclusions, most course of construction policies are 'all-risk'.
Unless something is specifically deemed an uncovered peril when your policy is set up, course of construction insurance covers a vast range of damages that could accidentally affect your job site or project.
Sometimes policies will exclude cover for damages from:
- Flood damage
- Intentional damage
Also, don't count on course of construction to cover you for everything that occurs during an active build. The policy isn’t designed to cover:
- Employee injuries
- Third-party injuries
- Third-party property damage
- Professional negligence
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Course of Construction Coverage is Smart Protection
Should you start a project without course of construction coverage in place?
Imagine that you've invested 5 months in a major residential remodel plus addition. Your whole crew has been there every day. You've invested half a year of manpower, materials, and effort into this one project.
Then, one week shy of completion, an electric fire burns the entire house to the ground. Including everything you've worked so hard to build.
Would your construction business be able to survive the financial loss?
With course of construction coverage, you'll never have to find out the answer. Your policy will help cover costs associated with damage from:
- Burglary and Theft
You don’t want to bet the financial health of your construction business on one project. Cover your business against the risk of losses associated with an active construction project with protection against unforeseen perils that could end up taking a very big bite out of your bottom line.
Be sure your business is covered for the risks that are commonly faced during an active build. A course of construction insurance policy can help you rest easy knowing that all the time and money you've poured into your project is protected.
Course of construction insurance will protect your investment in materials, equipment, supplies, and man-hours from unforeseen events such as vandalism, fire, theft, and natural disaster.