What coverages you should consider for your Builders Risk

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Building your new home is a very exciting undertaking and most certainly a large financial investment and that is why you should have proper insurance protection when completing your build from start to finish.  The proper time to insure your new build, (also known as a Builders Risk or Course of Construction (COC) policy) is before you break ground on the site of your build.  After a project is started, the insurance costs are far greater than before you break ground. 

There are two most important factors to a new build. These would be the soft costs and the hard costs that you want to insure. The total amount of insurance you want to have on your new investment, should be inclusive to cover both the soft cost and the hard costs to the full completion of your project, right up to the point of occupancy.

To complete your new build, you may be hiring a general contractor or assuming that role yourself. Either way, you should make sure you obtain a current "Certificate of Insurance" confirmation from each of the sub-trades completing their tasks to contribute to the build.     

What are soft costs vs hard costs?

Some of the common types of soft costs in construction include:

• Architectural, planning, and engineering fees
• Site analysis costs
• Survey fees
• Geotechnical costs
• Legal fees, permits, and taxes, property and construction insurance
• Construction loan fees, interest, and other related financing costs
• Administrative expenses

Soft construction costs may also include expenses incurred after the completion of a building, including marketing costs, security, lease-up charges, maintenance costs, etc. 

Hard costs would be the "bricks-and-mortar" and /or "tangible costs associated with the new build. Such hard costs would include:

• Construction materials
• Labor 
• Cost of buying the required materials such as steel, wood, glass windows, doors, insulation, etc.
• Electrical
• Plumbing
• Water/sewer/septic hook-up
• HVAC - heating and air conditioning
• Alarm systems, and other fire protection built-in devices
• Lanscaping is also a hard cost that commonly gets overlooked

What insurance should I have?

Most commonly we will provide you with a quotation with the following coverages:

• Combined limit for completion of Build (incld. Soft & Hard Costs) 
• 'In Transit' Sub-Limit
• Any Other Location' Sub-Limit
• Commercial General Liability
• Bodily Injury & Property Damage
• Personal & Advertising Injury (Any 1 Person Or Organization)
• Medical Expense Limit
• General Aggregate Limit
• Limitation of Liability Coverage to Designated Premises

Complete the short questionnaire below and speak with an experienced representative at Pedestal Insurance Brokers Inc. to assist you with your project in determining what insurance you will require for your project.