The Importance of Builders Risk Insurance for Minnesota Contractors
As a home builder, remodeler or commercial construction contractor you face a number of risk factors on a daily basis. After all, it's part of the business. The construction business could be doing well one month and then things could taper off suddenly. However, this is just one of many risks you have to deal with. For example, many contractors make the mistake of not taking out the right builders risk insurance. When this happens, physical and financial disaster could be lurking just around the corner and you might not realize it until it's too late. Take the example story of Charles E.
Charles was a successful home builder and he understood the business well. He also knew about the importance of insurance and made sure his equipment, vehicles, and employees were all covered. However, Charles made the error of thinking that all course of construction insurance was the same and this would come back to haunt him. Here is what happened:
About halfway through a project (his company was creating parking lots, foundations, and buildings for a large strip mall), Charles ran into a manpower shortage. In fact, he had several problems and needed to subcontract some of the project. He hired local contractors for electrical and roofing work. However, Charles forgot to include these subcontractors in his insurance policy, because he believed they had their own coverage.
During the middle of construction, a large storm hit the Southeastern Minnesota area. It came with very high winds, damaging hail and several tornadoes were spawned. In fact, there was an enormous amount of roof damage done to two buildings which were nearing completion.
When Charles contacted his insurance agent he was shocked to discover his insurance would not cover the damages because the work was done by subcontractors not covered by his policy. The expenses were significant and ended up costing Charles' company dearly. This as an important (although bitter lesson) and it could have been avoided with something as simple as an automatic additional coverage clause.
What is Builders Risk Insurance?
This kind of coverage is designed to pay for damages while you are in the process of construction. In fact, this is the most vulnerable time for most home builders, because their work is typically exposed to the elements, and can easily be destroyed. This insurance protects you against many things which can happen.
Who Needs Course of Construction Insurance?
- Building contractors
- Commercial construction contractors
- Home improvement contractors
- Remodeling contractors
- Siding and roofing professionals
- Landscaping professionals
- Cement contractors
- Any contractor whose work is vulnerable during the construction phase
Here are some of things you may receive, normally:
- Damage to property - includes buildings, structures, machinery, materials, temporary structures like fencing, scaffolds, landscaping, and signs.
- Hazards - includes storms, hail, fire, lightning, power outages, and broken water lines
- Theft and vandalism issues
- Custom built home coverage
It's very important to consider options such as:
- Insurance coverage for subcontractors
- Design flaw damages
- Damage caused by improper workmanship
- Increased general liability
- Performance bonds
Why You Need Insurance Customized to Your Business
At Insurance Brokers of Mn, we understand the needs of our contractors. In fact, our President, Gary Sorenson has been a part of the home builders insurance market for three decades. We have programs specifically designed to protect today's construction companies.
Because we are an insurance brokerage, you have the benefit of having comparison shopping done for you. We find you the right coverage and shop many companies like: Acuity, Auto Owners, Hanover, UFG, USLI, State Auto & Zurich,
Our agents are very familiar with risk management issues and are here to provide you with complete coverage for your business including vehicle insurance, workman’s compensation, general liability, umbrella liability policies, and bonding.
To discover the many construction insurance options available, just fill out the quote request form or you may call us toll free at 1-877-323-3314.
Agents located in: Anoka, Ada, Austin, Bemidji, Blaine, Brandon, Brooklyn Center, Buffalo,
Byron, Cambridge, Cannon Falls, Dawson, Duluth, Forest Lake, Graceville, Grand Forks, Ham Lake, Hermantown, Hibbing, Inver Grove Heights, Isanti, Jordan, Lino Lakes, Little Falls, Maple Plain, Pequot Lakes, Richfield, Roseville, St Cloud, Stillwater, Thief River Falls, Waconia