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Builders Risk Insurance

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Do I require builders risk insurance?

Builders Risk Insurance

If you're involved in a construction project, builders risk insurance can offer financial protection from unforeseen accidents, theft, and damage. It isn’t mandatory, but having it can save you from hefty unexpected costs.

When is builder risk insurance essential?

Starting New Construction

When breaking ground on a new project, it's the prime time to ensure everything is under coverage from day one.

Major Renovations

Even if you're not building something new, significant renovations can change the structure or value of a building significantly. It's not just about new constructions; renovations often carry their own sets of risks that should be insured against.

Contractual Obligations

Sometimes, before any work can commence, a contract might dictate the necessity of having builders risk insurance in place.

Why do you need builders risk insurance?

  • Protection from Losses: It protects against damages and losses resulting from incidents such as fires, theft, or natural disasters.

  • Contractual Requirements: Many contracts may necessitate having builders risk insurance before commencing work.

  • Financial Stability: In the event of a significant setback, having insurance means the financial burden doesn’t fall entirely on the property owner or the contractor.

How can obtain builders risk insurance?

Obtaining builders risk insurance involves:

  • Assessment: Understand the value of the entire project, including materials, labor, and soft costs.

  • Choosing Coverage: Decide between an all-risk policy (covers all risks unless explicitly excluded) or a named peril policy (only covers perils named in the policy).

  • Period of Coverage: Ensure the policy lasts for the entire duration of the construction or renovation.

Furthermore, the whole process might seem daunting, but with Gerrards’ assistance, it becomes significantly more manageable. Gerrards can guide you through each step, from choosing the best policy to ensuring you’re fully protected throughout your project’s timeline.

What are the advantages and disadvantages of Builders Risk Insurance?

  • Financial Security: Protects your investment from unforeseen events that can be financially draining.

  • Peace of Mind: Knowing you’re covered allows for smoother operations without constant worry.

  • Contract Fulfillment: Meets contractual obligations that require insurance.

  • Cost: It’s an added expense to the construction process.

  • Policy Limitations: Not everything might be covered, requiring careful review and potential additional coverage.

  • Claim Process: In case of a loss, the process of filing and getting a claim approved might be tedious.

Common misunderstandings

  • Duration of Coverage: Many believe once the policy is taken, it lasts indefinitely. However, it typically lasts only for the project’s duration.

  • Scope of Coverage: Some assume builders risk insurance covers personal injuries on site. However, injuries are generally covered under separate policies like liability insurance.

  • Total Protection: Many assume that if they have builders risk insurance, all possible risks and scenarios are covered. However, certain events or items might be excluded, making it essential to understand your policy’s specifics.

How can Gerrards help?

At Gerrards, a leading insurance broker in New Zealand specializing in business insurance, we understand the intricacies of builders risk insurance.

  • Expert Guidance: Our experienced team will guide you to choose the right policy tailored to your project’s needs.

  • Policy Comparison: We can provide comparisons from multiple insurers, ensuring you get the best value and coverage.

  • Claims Assistance: In the unfortunate event of a loss, our team will support you through the claims process, making it as smooth as possible.

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