How Builders Risk Coverage for Water Intrusion and Flood Differ

Builders Risk Tips With Director of Producer Training and Development

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3 min

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:

Hi there!

Man, it is raining cats and dogs. This weather makes for a bad hair day. But hey, the show must go on.

Let's get to the topic because I see the film crew come in with a bucket of water for special effects.

Stormy skies can be more than just a bad hairdo for your construction clients. Water damage can lead to costly losses if they don't have the right coverage.

But do you know the two basic ways we categorize water damage?

Let's talk about the difference between flood and water intrusion, and how our policy addresses each.

Would you believe me if I said it can be as simple as "where did the water come from?"

When flood waters rise — and this is a basic definition — it is a general and temporary condition of partial or complete inundation of normally dry land. So, this could be overflow of inland or tidal water. It could be rapid accumulation or runoff of surface water or storm surge.

An example of a flood claim would be:

A hurricane comes through. Dumping lots of rain. Then the nearby river overflows and water gets into the structure.

But, water intrusion is a little different.

It's what happens when you have overflow of a washing machine or even a burst pipe. Water intrusion can also be caused by heavy rain.

Let's return to our hurricane story for an example of a water intrusion claim.

Let's say a big storm blows off part of the roof on your construction project. Water intrudes, from the hole in the roof and damages lumber, drywall, flooring. That gets to be pretty pricey.

So OK, now that you know the difference in the terms, you need to know if coverage is available.

Our Zurich builders risk program covers water intrusion on the form for residential and commercial projects up to $75 million, as long as the damage is due to a covered cause of loss.

You also have access to a flood endorsement for residential and commercial one-shot policies.

If your client has a reporting form or deposit premium policy and needs coverage for flood, write that project on a one shot instead.

I encourage you to visit the forms library on our website to read the water section of our standard coverage forms. Also read up on the flood endorsement to familiarize yourself with what is and isn't covered.

I gotta go. Looks like the film crew is coming with even more water. ‘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.