New York’s construction industry is booming, with billions of dollars invested in new developments each year. As construction projects grow in complexity, so do the risks involved. From extreme weather events to theft and vandalism, unexpected disruptions can lead to costly delays and financial losses. Securing builders risk insurance in NY is crucial for protecting these investments. Here’s how this coverage can help contractors, developers, and property owners safeguard their projects from unforeseen setbacks.
What Is Builders Risk Insurance?
Builders risk insurance is a specialized type of business insurance that many New York contractors and developers use to protect their projects during construction. It provides financial coverage for damage to the structure, materials, and equipment before completion.
Common risks covered under builders risk insurance include:
- Weather-related damage: High winds, heavy rain, snow, and flooding can cause costly construction delays.
- Fire damage: Fires can destroy partially completed structures, requiring costly rebuilding.
- Theft and vandalism: Construction sites are prime targets for theft, with expensive materials and equipment often left unguarded.
- Construction material loss: Damage to on-site materials from improper storage or accidents can set back projects financially.
Without builders risk insurance, developers and contractors may have to absorb these costs out of pocket, making it essential for anyone involved in construction.
What Should Builders Risk Insurance Cover in New York?
Builders risk insurance policies vary depending on the project. While there are some common exclusions — such as acts of war or terrorism, employee theft, and faulty workmanship — most policies cover:
- Property damage: Protection for the structure under construction, materials, and temporary structures like scaffolding and fencing
- On-site equipment: Coverage for construction machinery, tools, and heavy equipment
- Business interruption costs: Compensation for financial losses due to construction delays caused by covered events
Contractors can also consider policy endorsements or additional coverage options, such as inland marine insurance or contractors equipment insurance.
Key Factors Influencing Policy Costs
Several factors influence builders risk insurance costs, including project size, duration, and location. In New York, where construction costs are among the highest in the world, insurance premiums can vary widely.
Factors that impact builders risk insurance premiums include:
- Project value: The higher the project cost, the higher the insurance premium.
- Construction type: Wood-frame construction typically has higher premiums than steel or concrete structures due to fire risk.
- Location: Projects in urban areas may have higher costs due to theft risks, while coastal developments face increased weather-related risks.
- Policy duration: Longer construction timelines may lead to higher premiums, as the risk exposure increases over time.
With New York City investing heavily in new developments, securing the right builders risk insurance is becoming more critical for developers to navigate rising construction costs.
Find the Right Builders Risk Policy
Builders risk insurance is not a one-size-fits-all policy. Rather, it should fit the project’s scope, timeline, and budget, aligning coverage with the unique risks of each development. Comprehensive coverage should include protection for structural damage, material loss, and unforeseen delays that could impact project completion. Additionally, flexibility is essential, allowing for extensions or modifications if construction timelines change or unexpected challenges arise.
Choosing the right coverage requires working with an experienced insurance provider who understands the unique risks associated with New York construction projects. A knowledgeable insurer can help tailor a policy to fit specific needs, whether for residential, commercial, or infrastructure developments. Call Provident Protection Plus to explore options that provide the protection your business and construction projects need.
About Provident Protection Plus
For more than 65 years, Provident Protection Plus has served businesses and residents across several states nationwide. Today, we are a wholly owned subsidiary of Provident Bank, the region’s premier banking institution. To learn more about our coverage options, contact our specialists today at (888) 990-0526.