Never guess where the responsibility lies! If your contractor agrees to purchase the insurance for your construction project, it is extremely important that you confirm that the coverage is in place prior to the start of construction. Chances are that you’ll be required to make interim payments to the contractor as the project progresses. As such, we suggest that your name appear on the policy, as an "additional named insured". In this way, your financial interest will be protected should an insured loss occur prior to completion. If you agree to purchase this form of insurance coverage, make sure you contact us before any construction begins. Most policies require that coverage is put in force prior to the pouring of the foundation. We will be happy to answer any questions you may have and guide you through the process of making sure the coverage you need is solidly in place. The articles which appear in this publication represent the opinions of the authors and do not represent or embody any official position of, or statement by IBAO or Blue Sky Financial Group; nor do they attempt to set forth definitive action standards or to provide legal advice.
Who insures a home under construction?
Posted by Blue Sky Financial Group
Posted on 10:24, Tuesday, June 9
If you are building a new home or renovating an existing one, you need to review your insurance. For residential buildings under construction or major renovation, a separate ‘Dwelling Under Construction’ policy or an amended dwelling policy is mandatory. Commercial buildings being constructed require a ‘Builder’s Risk’ policy to insure this exposure. These policies can be purchased by the owner of the property or by the contractor. The terms of the contract between owner and contractor will usually indicate whose responsibility it is to purchase this form of insurance coverage.
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