Should Builders Risk Be Placed by the Owner?

Weighing who should purchase the coverage

We are routinely asked by our builder clients whether it’s acceptable to have the homeowner purchase and Builders Risk insurancecarry the Builders Risk coverage.  The following are some points to ponder:

  • Are your materials covered while in transit and temporary storage?  If so, for how much?
  • How are you going to insure your business profit and overhead on the job?
  • Where you going to obtain coverages for your scaffolding and construction forms?
  • Can you be certain the coverage is actually in force?
  • Will the policy cover a collapse or theft of building materials before they are permanently attached?

The answers to the above questions are probably going to be unfavorable.  This is why we recommend that our builder clients carry the Builders Risk policy instead of allowing the homeowner to set it up.

 Source:  Jon Fritinger/Great American Insurance and Sadler & Company, Inc.
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