The primary way to manage property exposure claims during construction is through Builders Risk Insurance. This type of coverage is specifically designed to be active while projects are under construction, renovation, remodeling, or repair.
It is advisable to secure Builders Risk Insurance before starting any repairs or construction work. If a construction loan is involved, this insurance is typically required prior to the loan closing.
Builders Risk Insurance can also provide coverage for specific types of accidental loss, damage, or destruction of the insured property. However, it generally excludes claims related to defective work or design.
Simply put, Builders Risk Insurance functions similarly to a homeowners policy but without coverage for personal belongings.
