Insurance is all about mitigating clients’ risks, and builders risk coverage is no exception. However, because builders risk policies are often issued at the last minute, clients run the risk of having uninsured losses simply because the proper time and dialogue did not occur before the policy was secured.
As an agent, one of the most important responsibilities of your job is explaining coverage options to clients so they can make informed decisions. When it comes to builders risk insurance, standard coverage inclusions may meet the client’s exact needs, but certainly not in all circumstances. More often than not, your clients need the added protection offered by some combination of endorsements for change orders, soft costs, water intrusion, business income and extra expense, or flood and earthquake.
The question is: how can you be most effective in helping clients obtain the coverage they need? Rather than simply telling clients about available endorsements, ask questions to engage them in discussion, giving you an opportunity to learn more about their project.
For example, when talking to clients about change order coverage, you could start the discussion with a contractor by reminding them that change orders are a frequent occurrence. You might ask them how frequently they have had changed materials mid-project on previous construction sites.
Similarly, for the soft costs, water intrusion, business income and extra expense, and flood and earthquake coverage, ask your clients if they would be able to weather the financial burden that could come from uninsured losses. Using real numbers to project the potential financial impact can help clients see the value in adding optional endorsements to their policies.
When you engage clients in discussing endorsements rather than just telling them about the options so they can make informed decisions, you’re helping protect your clients from unnecessary risk. At the same time, you’re protecting yourself from the risk of an errors and omissions claim and dissatisfied clients whose losses weren’t covered.
To learn more about introducing your clients to endorsements that can tailor their policies, download Helping Builders Risk Clients Understand Soft Costs.
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.
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