Builder’s Risk Insurance: Protecting Your Investment

Building a commercial structure means taking on risk. Unforeseen incidents like fires, natural disasters, or vandalism can destroy or greatly damage property under construction.  For that reason, construction companies and property owners frequently purchase builder’s risk insurance. A builder’s risk insurance policy protects the policyholder from risks associated with building, renovating or repairing a structure.  However, a builder’s risk insurance policy also has complicated and confusing terms like co-insurance penalties.

When a natural disaster or other unfortunate incident occurs to a property under construction or major renovation, builder’s risk insurance can provide peace of mind and a financial safety net. However, an insurance company will often deny or underpay a legitimate claim based on their mis-application of policy terms and conditions. When an insurance company wrongfully denies or underpays a claim, the policyholder needs a strong advocate at their side.

Pearson Legal, P.C. knows how to obtain justice for clients whose good faith insurance claims have been wrongfully denied or underpaid. An experienced builder’s risk insurance claims attorney can answer your questions in an initial consultation. After reviewing the circumstances of your case with you, Pearson Legal, P.C. can provide you with specific information and next steps to consider in pursuing legal action against your insurance company. 

What You Need to Know About Builder’s Risk Insurance

Keep in mind that an insurance policy covering builder’s risk typically covers only new construction costs. For a construction project on an existing structure, only newly repaired or renovated segments will be insurable. Likewise, the value of a new construction component of a project is usually covered whereas damage to the original structure is likely excluded from builder’s risk coverage.

Just as with other types of property insurance, the limits and coverage of your builder’s risk insurance policy are defined within the agreement itself, so any loss or damage which occurs outside of policy provisions will not be covered. Co-insurance penalties are common in most builder’s risk policies and the terms are not standard in every policy. This places added emphasis on negotiating the terms of your builder’s risk insurance policy up front. If you know that a particular construction project carries with it a specific risk or peril, then it is crucial to attempt to have that risk included within your policy, especially if insurers do not typically cover that particular risk item. Examples of risk items not usually covered in a builder’s risk insurance policy include additional costs due to project delays and items such as fencing, walkways, and swimming pools which are external to the structure under construction.

Moving Forward with Confidence: Working with Pearson Legal, P.C. 

Construction and renovation jobs are stressful enough. Builder’s risk insurance claims are not only complex but also time consuming. The skilled team of attorneys at Pearson Legal, P.C. understands the realities of construction and renovation projects. With that in mind, we take seriously the responsibility of representing clients in builder’s risk cases. To learn more about our office and what sets us apart, contact us today. We offer convenient free consultations where you can receive feedback about your specific circumstances. 

Construction companies and property owners alike have seen tremendous results when employing Pearson Legal, P.C. for their legal needs. Contacting our team of experienced insurance claim denial attorneys means finding peace of mind in a tumultuous and challenging time.