What Is Covered By Your Modern Home Builder’s Risk Insurance Policy?

When you have hired a modern home builder to work on the construction of your new house, they will have taken out a risk insurance policy that is designed to protect their interests during the project. As the property owner, you may also have some interests covered by the policy. Even though this is specific to each project, what sorts of things can you expect to be covered?
Equipment, Materials and Supplies

• All construction materials, equipment, tools and other supplies should be insured whilst they are in storage, in transit and onsite. Your policy should protect against theft, fire, weather, sink holes and water damage.
• The policy should provide coverage for the costs of replacing equipment, tools and other supplies. It should also include reimbursement of rental costs if any are accrued.
• Make sure that you are aware of any provisions in the policy that limit your coverage as a result of damages that have arisen from specific events. Adequate general liability should be provided.
• Any equipment that is loaned to other people, rented, borrowed or newly acquired should be covered. You will also need to check whether fences and scaffolding are also covered.

General Provisions

• The policy may cover any pollution that is found onsite or accidentally caused by the builder. Both the owner and the builder should be aware of any remedies or costs involved as a result of this.
• The policy should cover any damage that is caused by design errors or faulty workmanship. Errors and Omissions coverage (which protects the builder’s errors) should also be included.
• The total coverage of the policy should be adequate enough to cover the cost of the structure and any improvements. Any conflicts between the builder’s and owner’s policies need to be resolved.
  
  

There are a number of other areas that are generally covered by risk insurance, but you will need to speak with your modern home builder and ask to see a copy of the policy if you want to garner an understanding of them all. If construction looks as if it is going to extend past the policy period, it is important that it is renewed well in advance to ensure cover.