Anyone who has worked more than one project in construction knows at least some of the risks that merit purchasing builders risk insurance. However, not everyone is as familiar with installation floater insurance, and many are uncertain whether they need both. Here is an explanation ofinstallation floater vs. builders risk.
Builders risk is insurance for all the big and small mishaps that might cost you money on a specific project. It also protects subcontractors involved, as well as the manager and property owner. Most policies cover the following incidents:
- Extreme weather
- Faulty materials
The word floater refers to a type of insurance that covers personal property that is portable and not tied to a specific location. In the construction industry, installation floater insurance covers the cost of the materials you are installing. A single policy covers multiple projects, and benefits only the party that purchases it. It is a supplement to builders risk, rather than a replacement for it, and can even be used to pay the builders risk deductible.
An installation floater is a policy to consider in addition to builders risk. With the two in place, you can have peace of mind knowing that you are prepared, no matter what happens on the construction site.
Whenever starting a construction project, builders risk insurance in one of the most essential protections you can establish. However, it is also one of the most misunderstood forms of coverage, given the unique design of coverage terms to meet a specific projects needs. However, if it is properly constructed, it can be more of the most powerful tools in a risk management strategy.
Also known as course of construction insurance, the coverage plan will have an effective date that is arranged by the insured but an expiration date for when construction is completed. The property must be ready for use in order for the policy to be terminated. During the course of the project, this coverage would protect from losses that could be incurred from hail, lightning, fire, explosions, vandalism, theft, or hurricanes. Depending on the location of the project, earthquakes, wind, and flood may or may not be included as well. Standard exclusions typically list normal wear and tear and acts that involve employee theft or faulty planning, executing, and design.
Anyone with a financial interest in the construction project, whether owner, lender, contractor or subcontractors, may wish to have this additional coverage added to the contract or to a standard BOP policy. Lenders may require it, should the project be financed. Having the wrong kind of coverage is just as damaging as not having coverage at all. Guard your exposures through a builder’s risk plan.