Contractors need builders risk insurance for every course of construction project. That fact only becomes more evident when starting multiple projects every year. To conveniently secure coverage, qualified contractors can benefit from a builders risk reporting form policy. Rather than coordinating policy issuance with their agent or broker every time they have a new construction or remodeling project, clients using the reporting form policy can manage their insurance, with some input and guidance from their insurance professional, as necessary.
However, in order to ensure that your clients will be covered in the event of a loss, agents and brokers are responsible for ensuring clients fully understand how to complete the reporting form, when reporting is necessary and when to submit premium payments.
Follow these five steps to help your clients accurately use reporting form policies:
1. Review the policy features and structure together. Before issuing the policy, meet with your client to review the reporting and eligibility guidelines, especially when reporting remodeling projects, to ensure there is a clear understanding of the requirements associated with the policy form. It is also critically important that clients using the reporting form policy understand that new construction is covered by the existing policy only when the start and/or inventory of structures is properly reported and the report and premium due are submitted together to the appropriate address by the required due date. Remember, the reporting form policy offered by US Assure is intended only for new starts beginning during the policy period. However, coverage can be extended to pre-existing structures if reported within five days of the policy’s effective date or if the underwriter has granted approval to report the pre-existing inventory as new starts on the first scheduled report.
2. Understand the differences between annual reporting forms and monthly reporting forms. Your clients need to know whether their reporting form policy is annual or monthly, as each type of form comes with different reporting requirements and each type handles late reports differently. Refer to the appropriate coverage form for more details and specific requirements.
3. Discuss what constitutes a start. Because one of the requirements for coverage to take effect is properly reporting starts and/or inventory, clients need to understand how a start is defined under the builders risk policy. Of course, the actual start of construction would be considered a start, but under the Builders Risk Plan insured by Zurich, a start also means when construction materials that will be used in a completed structure are actually delivered to the job site.
4. Help clients understand premium calculations. Depending on whether the annual or monthly rate was selected at policy issuance, the client is responsible for calculating and remitting the appropriate premium payment for subsequent starts and/or inventory after the policy has been issued. In order to avoid potential lapses in coverage, clients need to understand how to calculate the amount due. Start with the total estimated completed value for each structure and divide it by $100. Then, look for the premium rate indicated in the policy itself and multiply the numbers together to get the amount due.
5. Educate clients about change orders. Changes to construction plans occur frequently. However, when clients use the reporting form policy, they are taking on the responsibility to submit notification of changes in a timely manner. Talk to clients about adding automatic change order coverage through a policy endorsement.
The reporting form policy can make insuring construction projects easier for agents and their contractors. To ensure your contractors have the best course of construction insurance coverage available, download our Builders Risk Reporting Form Guidelines today.
This is intended as a general description of certain types of insurance and services available to qualified customers. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.
Thank you. We appreciate your feedback.