If you have questions about builder's risk insurance, Calgary brokers at Krywolt have answers! Call 403-475-5434 today to speak with our friendly, qualified Krywolt Insurance brokers and learn more about why having Calgary builder's risk insurance is so necessary for contractors and other professionals involved in the construction industry.
What Does Calgary Builder's Risk Insurance Cover?
A typical builder's risk insurance policy protects a building while it’s under construction or being renovated.
A typical Calgary builder's risk insurance policy provides protection against damage or loss to the building, equipment and supplies caused by natural disasters, accidents causing a fire or explosion, theft and vandalism. Also known as "course of construction" insurance, this construction insurance policy may vary from provider to provider. It also has many extensions available, which can help to provide more comprehensive insurance coverage so you can rest easily at night knowing you have the necessary protection against financial loss to avoid stressful, damaging financial setbacks caused by lawsuits, property damage and more.
Because there can be so much variation in what can be included in builder's risk insurance, Calgary workers should be sure to clearly communicate their insurance needs to our insurance experts so we can tailor a policy to provide them with the right builder's risk coverage.
What is Not Covered by Builder's Risk Insurance?
Calgary builder's risk insurance is not all-encompassing, and there are still many perils that you will not be protected against without opting for other insurance policies. For instance, common exclusions to builder's risk insurance coverage include:
- Injury to employees
- Damage caused by faulty design
- Damage to tools and equipment
- Employee theft
- Flawed workmanship
- Damage to your vehicle
- Nuclear accidents
- Water damage
- Government activities
- Mechanical breakdowns
- Contractual penalties
You will need to purchase additional business insurance coverage to ensure you are properly protected in these scenarios. Our construction insurance brokers at Krywolt Insurance will be happy to help you get any additional insurance coverage alongside your Calgary builder's risk insurance policy.Â
When Should You Buy Builder's Risk Insurance in Calgary?
When planning to purchase builder's risk insurance, Calgary residents need to understand how important it is to get coverage in place before the project begins. The reason for this is that you may not qualify for course of construction policy coverage if the project has already started. The major risk for Calgary builder's risk insurance is primarily at the end of the construction because that's when the majority of the building is constructed, and there's more to lose in a disastrous event, but the policy and rates are determined from the day construction starts to project completion. Therefore, insurance companies may decline to insure a property when construction has already begun, will charge a higher rate, or may agree to charge insurance back to the day of construction.
If construction has already started when you are shopping around for a Calgary builder's risk insurance policy, your insurance provider will likely note how far along the project is before the coverage start date. Depending on the provider and the scope of your project, the insurance company may send a representative to your property to confirm how much work has been completed in person. As a rule, always purchase builder’s risk insurance in advance to avoid such inconvenience or additional cost.
Is Calgary Builder's Risk Insurance Required?
When first learning about builder's risk insurance, Alberta property owners and builders have the tendency to think it's unnecessary. They're under the mistaken belief that their existing insurance policies will protect them during construction projects. However, this is not the case. Other insurance policies will not usually protect your property if it's damaged during construction or a renovation project. That's why it's so important to have an open line of communication with your broker to understand what is and is not protected by your current insurance policy.
Having Calgary builder's risk insurance is not usually compulsory by law—unlike other types of insurance, such as worker's compensation or commercial auto insurance. However, it may be part of a contractual agreement between parties, especially if the project is funded by a bank or lender. Because many prospective clients will simply refuse to work with a contracting professional who doesn't have proof of comprehensive insurance protection that includes builder's risk insurance, Calgary residents who don't have it could be forced to walk away from lucrative contracts and let them be taken by competitors instead, which is far more damaging to your bottom line than the reasonable cost of the right insurance coverage.
Even if having a Calgary builder's risk insurance policy is not required in your contract, it's still worth considering. Think about whether you'd be able to afford to replace or repair damage to your building out-of-pocket. If the answer is no, then don't take the risk. Ensure you're adequately covered with the right builder's risk insurance in Calgary. Â
What Types of Property Are Covered By Builder's Risk Insurance?
Calgary insurance policies often cover specific types of properties or items, such as in the care of commercial and personal auto insurance. But essentially, any type of property, commercial or residential, government-funded or private, that is undergoing construction or a major renovation can be covered by builder's risk insurance. Alberta workers: whether you opt for the coverage is usually up to the individual—unless otherwise stipulated in a contract. A few examples where Calgary builder's risk insurance would be needed are:
- Residential new construction
- Residential remodelling or smaller projects, such as replacing windows and doors
- Model homes and model home contents
- Commercial property construction
- Adding a second storey or addition to the property
- Any other kind of major renovation
Is Property Insurance the Same as Builder's Risk Insurance?
Calgary property insurance is a traditional type of policy that covers an existing structure. While it covers some of the same perils as Calgary builder's risk insurance, such as damage from fire, theft and severe weather, it only protects your property when there is no construction underway. Contrarily, Calgary builder's risk insurance is a form of property insurance specifically designed to cover and only protect your property during construction. The policy is usually designed to end around the same time that your project should be completed.
Do I Need a Calgary Builder's Risk Insurance Policy if I Already Have Contractor's Insurance?
Yes, even if you have contractor insurance, you need builder's risk insurance. Calgary contractor's insurance policies generally protect against lawsuits or claims that arise from property damage or bodily injury that may occur on a construction site. The policy covers claims and settlements that might happen during and after the project is completed. However, contractor's insurance does not necessarily protect against the same amount of perils as builder's risk insurance.Â
Calgary policyholders who need more information to fully understand what is and is not covered by their insurance provider should schedule an appointment to talk to a local Krywolt Insurance broker. Any one of our dedicated brokers will be able to clearly lay out what kind of coverage you need, so you never have to worry about paying for damages out of pocket or not being compensated due to a loss or injury.
How Much Does It Cost to Get Builder's Risk Insurance?
Calgary insurance policies aren’t one-size-fits-all solutions, so every Calgary builder's risk insurance policy is different, and the cost of your unique policy will vary depending on what you need.Â
For example, your policy may require more coverage, or you may want to add extensions to provide additional protection for your construction project. There are several factors for builder's risk insurance Calgary residents may encounter that will influence the overall cost of their policy, including:
- Construction materials
- The type of protection provided
- Policy details, like coverage amounts and limits
- Previous claims
In general, you want to choose coverage limits that are equal to the anticipated cost of construction. This will impact the cost of your Calgary builder's risk insurance rate, as the more expensive the project is, the higher your insurance rate is likely to be. Other factors that will affect insurance premiums are the location of the coverage, including whether there are fire hydrants close to the property or service by a corresponding firehall.
When looking to establish the cost of builder's risk insurance, Calgary property owners and builders should start by contacting a Krywolt insurance broker today to ask for a construction insurance quote. Our team of dedicated brokers can be reached at 403-475-5434 or via our online form.
How Long Will My Calgary Builder's Risk Insurance Last?
Typically, Calgary builder's risk insurance policies can be written for periods of three months, six months, or a year. However, they can be extended, provided the project meets certain qualifications. In these cases, it is important to inform the underwriters of any significant delays as they become known and to seek an extension sooner than later for your builder's risk insurance.
Calgary project extensions, and any resulting extension fees, may be granted depending on factors such as:
- The current status of the project
- Known losses
- The reason for the delay
- Duration of the extension
- Project complexity
- Claims history
- The insurer's current underwriting appetite or willingness to take on risk
Unexpected delays can occur on any project, so it’s important to choose a realistic term length for your project when getting builder's risk insurance. Calgary residents should speak with our insurance brokers about any anticipated timelines and scenarios for extensions when getting insurance coverage.
