Builders Risk Policy and New York Property Insurance
When building construction occurs in New York, either brand new from the ground up, or the renovation of an existing structure, risk management professionals consider that the exposure constitutes purchasing a builders risk policy. Depending on the details surrounding the project, the risk management professional needs all of the available information in order for he/she to secure the proper New York Property Insurance in the form of a builders risk insurance policy. As a broker, you might agree, or suggest another property policy that provides the same, similar, or better coverage than a builders risk insurance policy.
The answer may lie in knowing exactly what perils exist in the process of construction for any particular project. The exposure review should start with the insurable interest of the various parties to the construction contract to build the new building. The answer will inevitably present itself once all of the facts are in.
Important to ensure that adequate coverage is in place
The builders risk policy, whether obtained by the owner or the general contractor (GC), will need to be carefully reviewed, as with any property insurance policy, in order to make sure that coverage terms (property insured, soft costs, etc.) and perils insured are appropriate for the exposure (i.e., special perils including flood and earthquake).
In addition, it’s also important to note whether or not the limit will satisfy all insurable interests including whatever is required specifically in the owner’s mortgage agreement and the construction agreement between the owner and GC. Special consideration should be made as to the amount of deductible and which party is responsible for its cost (the owner or GC) even when the general contractor obtains the policy. There must be clarity in the construction agreement as to who is responsible for the policy deductible if it will not be the sole responsibility of the first named insured.
If a building is constructed new, or is renovated to become modernized or assume new occupancies, the risk management professional has to consider the construction exposure from various interests, such as owner, GC, and subcontractor, to ensure that each has appropriate coverage for its exposures. New York Property Insurance is available through wholesalers who specialize in quality commercial insurance services.