Builders Risk Insurance for Florida Construction

Business Insurance for Builders Risk

Builders Risk Insurance is specialized property coverage for buildings under construction or major renovation. This policy protects the structure, materials, and equipment at the construction site from covered perils like fire, wind, theft, and vandalism from groundbreaking through project completion. In Florida, where construction projects face unique challenges from hurricanes and severe weather, Builders Risk coverage is essential protection for contractors, property owners, and lenders with interests in construction projects.

Why Your Business Needs This

• Standard commercial property insurance doesn't cover buildings under construction
• Florida construction projects are exposed to hurricanes, tropical storms, and severe weather throughout the building season
• Construction sites are vulnerable to theft of materials, tools, and equipment
• Lenders typically require Builders Risk coverage as a loan condition
• One significant loss during construction can derail your entire project without adequate protection

What It Covers

Builders Risk Insurance covers the building structure under construction including materials, fixtures, and equipment that will become a permanent part of the finished building. The policy protects against fire, lightning, wind, hail, theft, vandalism, and other covered perils. Coverage typically includes materials stored on site or in transit to the project. Temporary structures, scaffolding, and construction equipment may be included depending on your policy. The coverage begins when materials arrive at the site and continues until the project is complete and occupied or the policy period expires.

Who Should Purchase Builders Risk Coverage?

The party with an insurable interest in the project should purchase coverage. This may be the general contractor, property owner, or developer depending on contract terms. Many Florida construction contracts specify who is responsible for obtaining Builders Risk insurance. When multiple parties have interests in the project, the policy should name all interested parties as insureds including the owner, general contractor, subcontractors, and lender. The Gordon Agency experienced agents help determine appropriate parties to include based on your project structure.

How Is the Property Valued?

Builders Risk policies typically provide coverage on a completed value basis, insuring the project for its full value when finished even though only a portion may be complete at the time of loss. This ensures adequate coverage as construction progresses. The insured value should include hard costs like materials and labor but typically excludes soft costs such as architectural fees, financing charges, and developer overhead unless specifically added by endorsement. Your coverage limit should match the total completed value of the project.

What About Flood and Wind Coverage in Florida?

Standard Builders Risk policies may exclude or limit coverage for flood and named windstorm in Florida. Given the hurricane exposure throughout the state, you need to specifically address wind coverage. Some carriers offer named storm coverage with higher deductibles and waiting periods. Flood coverage for construction projects may require a separate policy. Working with The Gordon Agency ensures your Florida construction project has appropriate coverage for the unique weather perils in our region.

What Happens When the Project Is Complete?

Builders Risk coverage terminates when the project is complete, occupied, or the policy period expires, whichever comes first. As you near completion, you'll need to transition to permanent property insurance. For owner-occupied buildings, this means obtaining commercial property coverage. For contractors, your completed operations exposure shifts to your general liability policy. Plan this transition carefully to avoid gaps in coverage between the end of Builders Risk and the start of permanent property insurance.