A Course of Construction is a type of Business Insurance Policy that provides temporary coverage against damages or losses that may occur during the construction. The Course of Construction is also referred to as Builders Risk Insurance. This insurance coverage is designed to cover the building structure and can be expanded to include the building materials inside the premises or in transit on the site.
The Course of Construction is designed to protect the owners and contractors against financial risk due to the damages such as:
The Course of Construction Insurance typically does not cover damages due to earthquakes and flooding. However, to cover these perils, you can purchase an additional policy. Builders Risk Insurance coverage typically ends once the project or construction is complete. In addition, coverage may also include or extended to have Hard Costs and Soft Costs listed in your policy.
Hard Costs, also known as “ brick-and-mortar costs,” are the expenses related directly to the production and development of the construction and building, such as the labor and materials. Hard Cost is more tangible that it is easier to estimate in creating a project breakdown or even before the project has begun. The cost of labor and materials to complete a project is under the coverage of hard costs.
Soft cost does not directly cover the production of the building, unlike hard costs. It is usually consulted with intangible items such as real estate fees, inspection fees. , taxes, and legal fees. Soft costs are the expenses that are not directly related to labor or the physical construction materials that are needed to complete the project.
In planning a project, it is important to estimate the budget needed; that is why Hard Cost and Soft Cost are important to understand to determine much easier the cost you need to complete the project.
Course of Construction usually covers unexpected disasters. On the other hand, it does not provide coverage for negligence in operation, resulting in mechanical failure, material, or workmanship.
The Course of Construction typically costs between one and four percent of the construction cost, depends on the coverage and exclusions listed in the policy. It is important to have Builders Risk Insurance as it will cover potential claims or property damage that may arise during the construction.
These are some factors that may affect the cost of Course and Construction Insurance:
Covering an existing building or structure can cause a higher cost of insurance.
The premium rates may increase depending on where the project is located, with a higher peril chance.
High-quality materials or equipment may require more coverage that can increase the insurance rate.
These are some guidelines that will help you find the best Insurance Provider.
Most of the Builders' Risk policies are written on Inland Marine forms, which make the coverage broader and more tailored to your construction project needs. If you have tools and equipment that you take to one place from a project site, Inland Marine Insurance is the right policy to cover your tools and equipment. It is essential to choose an experienced insurance provider to help you determine the right coverage for your business.