Calculating the right amount of builder’s risk insurance is critical to protect your construction projects from unexpected losses. This type of insurance covers damages to buildings under construction, as well as related materials and equipment, ensuring your business doesn’t suffer financial setbacks due to unforeseen events.
Key Factors to Consider
- Project Value:
- Base your coverage on the total completed value of the project, including materials, labor, and overhead.
- Avoid underestimating costs to ensure adequate protection.
- Material and Equipment Costs:
- Include the value of construction materials stored on-site and off-site.
- Add coverage for specialized equipment used in the project.
- Soft Costs:
- Factor in expenses like architectural fees, permits, and loan interest that may arise due to project delays.
- Duration of the Project:
- Ensure the policy covers the entire construction timeline, including potential extensions.
Accurate calculations for builder’s risk coverage can prevent financial gaps during your project. Consult an insurance professional to tailor the policy to your specific needs.
