Whenever a new house is built, many risks are being associated with the property. The property insurance includes the builder’s risk insurance. This type of insurance will cover the person’s or the organizational property, equipment which is used for the construction, they pay for the damage or the physical loss.
Generally this type of Construction insurance will be purchased by the owner of the building. The owner will own this type of insurance in order to safeguard their investment. If anything happens to the property, reimbursement will be done for the property which is damaged.
Necessity of the builder’s risk insurance:
Since a lot of risks might occur when we do construction, this insurance is needed. The damages which generally occur may include fire, damage due to heavy winds etc.
This will cover the issues which occurred only during the construction period. Once the construction period is terminated, the insurance will also get terminated. The insurance will cover losses or damages due to accidents, vandalism, fire, lightning, wind etc. But the losses which occurred due to big natural calamities are not being covered like earthquake, flood etc.
Suppose if the owner of the building wants to extend or renovate the existing building, apart from again purchasing the new builder’s risk insurance the existing property insurance is sufficient for the work which is done as of now. Except if the new buildings are constructed in a new place which is vacant this type of insurance is required for covering.