Book an appointment here

Builders Risk Insurance

Get the right advice from insurance professionals

Or speak to a broker 0800 374 691


How much is builders risk insurance?

Builders Risk Insurance Cost

Builders risk insurance typically costs an average of 0.4% of the contract value or project budget. This means that for a project valued at $1 million, the insurance might cost around $4,000.

What does builders risk insurance cover?

Protection against Damage or Loss

Builders risk insurance offers coverage against damages to the building under construction or renovation. This can be due to a multitude of reasons ranging from vandalism to acts of nature.

Materials and Equipment Coverage

Apart from the actual structure, the policy also protects materials, fixtures, and equipment meant for the project.

Flexible Duration

Policies can typically be purchased for specified time frame and can be extended if the project isn't completed within the initially estimated time.

How is the cost of builders risk insurance determined?

Insurance companies take several factors into account when determining the cost. These factors include:

  1. Project Value: As previously mentioned, the insurance is often a percentage of the total value of the project.
  2. Project Duration: Longer projects might have higher premiums because of the extended exposure to potential risks.
  3. Type of Construction: Different types of construction materials and methods can influence the cost. For example, a wooden structure might have different risks compared to a metal or concrete one.
  4. Location: Projects in areas prone to natural disasters like earthquakes or floods might have higher premiums.

Why do you need builders risk insurance?

  • Mitigate Construction Risks: This insurance is specifically designed to cover property damage and financial losses that might occur during construction. Think of events like fires, theft, or natural calamities. As these risks can be substantial, the premium is calculated as a percentage of the total contract value.

  • Coverage Variability: Every construction project is different, and the risks associated vary. A larger project with more potential risks will have a higher premium.

  • A Safety Net for Businesses: For builders and contractors, unforeseen incidents can lead to hefty financial burdens. Insurance acts as a financial cushion, preventing unexpected expenses from destabilising a business’s operations.

What are the advantages and disadvantages?

Like all insurance types, builders risk insurance comes with its set of pros and cons.

  1. Financial Protection: Provides protection against unforeseen damages, saving potentially massive out-of-pocket costs.
  2. Peace of Mind: Knowing you’re covered can relieve stress for both the builder and property owner.
  3. Customisable: Policies can be tailored to fit specific project needs, ensuring relevant risks are covered.
  1. Additional Costs: Premiums add to the overall project cost.
  2. Policy Limitations: Some policies might have exclusions that don’t cover certain risks.
  3. Claim Delays: Sometimes, processing a claim can take time, potentially delaying the project.

Common Misunderstandings

  • All Risks Are Covered: No insurance policy covers every possible risk. It’s essential to understand the exclusions.

  • One Size Fits All: Just because two projects have the same budget doesn’t mean they’ll have the same premium. Other factors like location, duration, and specifics of the work involved play a role.

How can Gerrards help?

At Gerrards, we specialise in business insurance and understand the unique needs of our New Zealand clientele.

  • Tailored Solutions: Every project is different, and we ensure that your policy matches your specific needs.

  • Expert Guidance: Our team can guide you through the intricacies of builders risk insurance, ensuring you understand every aspect.

  • Claims Assistance: Should the need arise, Gerrards is there to assist you with the claims process, ensuring a smooth experience.

What our clients are saying