Eligible Builders Risk Clients and Construction Projects

Who pays for builders risk insurance?

Nearly any client with a financial interest in the completed project is eligible to purchase a builders risk insurance policy. Individuals or entities — including contractors, business owners, homeowners or financial institutions — are often your primary builders risk clients. Depending on the terms of the construction contract, the contractor or project owner may be required to purchase builders risk coverage. Get our project cheat sheet for lists of project examples. 

The Builders Risk Plan insured by Zurich allows for the policy to be purchased in the name of the owner or builder but not the mortgagee (bank). Contractors and other parties of interest may also be protected under an additional named insured clause.

Should your client choose to add the builder or owner as an additional named insured, be sure a waiver to subrogate is clearly outlined in the construction contract or agreement. This will protect the interest of additional named insureds should property damages occur during the course of construction.

Residential Projects

Builders risk insurance is crucial for any homeowner or residential contractor who is making changes to a property, whether it’s building a new one-to-four family home or remodeling an existing structure. Eligible residential clients may include:

  • Homeowners
  • House flippers
  • Landlords
  • Real estate agents
  • Residential contractors
  • Subcontractors

Commercial Projects

Contractors and owners of commercial property are also great candidates for builders risk insurance if they are conducting construction, renovation or installation. Eligible commercial clients may include:

  • Commercial contractors
  • Commercial property owners
  • Municipalities (local governments, school districts)
  • Real estate agents
  • Retail tenants who are expanding or remodeling a leased space
  • Subcontractors

What types of projects can builders risk insurance cover?

Builders risk insurance isn’t just for new home construction! Whether residential or commercial, our builders risk policy has a broad appetite for a variety of project types valued up to $75 million:

  • New Construction: This includes any new building constructed from the ground up, whether residential (house, apartment/condominium, duplex) or commercial (office building, restaurant, retail store).
  • Remodeling: A remodel involves changes to an existing space beyond an installation. In a residential property, this could include remodeling a kitchen or bathroom. Common commercial remodels may include a business expanding into an adjacent tenant space or updating the interior to a more modern look. 
  • Installation: These projects involve installing a single fixture or feature, such as new cabinets or flooring in a residential property, or an awning or signage for a commercial property. An installation implies a more limited scope compared to a complete remodel.

Related Topics

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