Does Builders Risk Insurance Cover Negligence?

Construction projects face a lot of risks during operation that could affect the project’s path to completion, such as unexpected fires, explosions, hail, lightning, theft, vandalism and more. Protecting different assets of a construction project is crucial no matter what position you are in. If you have any financial stake in a project, you should carry or make sure others are carrying builders risk insurance. 

This type of insurance can protect the construction project’s physical assets (materials, supplies, equipment, etc.) in case of an incident. Extended policies may even cover your scaffoldings and other temporary structures used in construction, and charges from the fire department.  

However, you will need a general liability policy to cover you against everything that your builders risk insurance will not. Hazards include injuries on your business property, damage to a rented commercial space and damages or injuries caused by your team. 

But what about negligence? Are accidents on behalf of you or your team covered under builder’s risk insurance? 

Negligence is a major concern in construction. But negligence can be a little confusing when it comes to insurance. Builders risk insurance may cover negligence while, at the same time, listing negligence as an exclusion in certain circumstances.  

Generally, you can expect that your policy will cover damages caused by negligence. However, certain other costs may be incurred owing to a contractor’s negligence, and your insurance policy may or may not cover these costs.  

Common Exclusions Under Builders Risk Insurance 
You will need both construction general liability and builders risk protection to cover your end when working on a construction project. Each policy can generally be expected to cover the gaps left by the other. However, this will still leave a few areas where you are not protected, such as earthquakes, floods, professional negligence, construction vehicles and equipment breakdown. 

If there are any major exclusions in your policy that leave you with gaps with which you are not comfortable, additional insurance can be purchased to cover most of these areas. There is a lot at risk in a construction project, and adequate coverage is of vital importance.  

If you have any stake in a construction project whether you are a contractor, property owner or architect, make sure to carry builders risk insurance. Speak with those involved as well as your insurance agent to make sure that your investment is covered in case of an accident, negligent or otherwise. Connect with an insurance agent about your builder’s risk insurance options today.