5 Builders Risk Policy Terms That Trip Agents Up (And What They Really Mean)
Builders Risk Tips With Director of Producer Training and Development
Each month, US Assure Director of Producer Training and Development Mary Stiglic joins us in the studio to address a common question or pain point to help you confidently sell to and service your construction insurance clients.
Read the Video Transcript:
HMU? IYKYK? What is she trying to say to me? Ugh! Oh, hi.
Oh. All this new lingo makes my eyes cross. I only know LOL and BOGO. Heck, someone emailed me OOO the other day. Is it really so hard to type “Out of Office?”
Just like when you're trying to master the Builders Risk Plan insured by Zurich. All the different terms can be a bit much.
Let's talk about a few that I get asked about all the time.
Number one, total completed value.
This is all costs associated with the building and designing of the covered property, including labor, overhead, materials, and if included in the project value, profit.
Number two, scope of work.
This is a list of construction and work activities that all contractors and subcontractors are obligated to do, as written in the construction agreement.
Number three, fully earned premium.
This means no premium will be refunded if the coverage ends or the policy is canceled. So, if you've heard of pro-rata cancellation this is the opposite.
Number four, actual cash value.
Actual cash value is different from replacement cost and agreed value. Actual cash value is the cost to replace the property or materials at the time of the loss, minus depreciation.
And number five, reporting form policy.
This builders risk policy is for contractors who build five or more structures in a 12-month period with values under $3 million. In most states, monthly or annual rate can be selected at policy issuance. This is one of several policy options with the Builders Risk Plan insured by Zurich.
So, now you know!
While there are a lot more terms unique to Zurich builders risk, these are the ones I'm asked about the most.
You know, back when I first started in builders risk, I had a notebook full of definitions, notes and doodles. But, we're a little more high tech now. Check out our terms glossary. Builders risk terms at your fingertips!
I hope this helps you understand these commonly misunderstood terms. I got to get back to decoding this text message.
‘Til next time.
This is intended as a general description of certain types of insurance and services available to qualified customers. Any description of policy provisions is meant to give a broad overview of coverages and does not revise or amend a policy. Refer to the policy coverage form for a complete representation of the scope of coverage, terms, conditions, exclusions and more. The policy is the contract that specifically and fully describes your coverage. Some products may not be available in all states and may only be offered on a non-admitted basis. Product availability is subject to change.
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