Builders Risk and Wrap-Up coverage provides comprehensive property and liability protection for construction projects, covering potential risks from start to finish. This guide explains the coverage details, duration, and how to obtain this crucial protection for your construction needs.
Table of Contents
- What is Builders Risk and Wrap-Up Coverage?
- What Does it Cover?
- Over What Time Period is Coverage Provided?
- How to Get Builders Risk and Wrap-Up Coverage
What is Builders Risk and Wrap-Up Coverage?
Builders Risk coverage, often termed Course of Construction (CoC) insurance, is a form of property insurance that is specifically designed to cover risks associated with construction projects. The project could be a new, from-the-ground-up construction of a building, an addition to an existing structure, or a repair on an existing building.
Wrap-Up Insurance is a liability coverage that provides protection from negligence-related losses for construction projects, offering coverage for property damage or bodily injury suffered by third parties resulting from the activities of a specified construction project.
What Does it Cover?
Builders Risk
A Builders Risk policy provides coverage for the property and materials associated with, and forming part of, a completed construction project. Coverage also includes expendable materials, temporary buildings, forms, hoardings, and other similar items. Coverage is usually provided on an “all risks” basis subject to certain exclusions, typically including common perils such as fire, theft, and water damage. There are often extensions available with a sub-limit of coverage applicable to materials stored off-site or while they are in transit.
Wrap-Up Liability
Wrap-Up Liability insurance protects the named insureds on a specific project from third party liability losses suffered as a result of the construction.
The named insureds covered under a Wrap-Up policy are usually very broad and could include the project owner (if specified on the policy), the general contractor, sub-contractors, as well as engineers and architects who perform work on the project site. An example of a situation where a typical Wrap-Up liability policy may respond would be a pedestrian slipping, falling and injuring themselves while walking through a construction site.
Both the Builders Risk and Wrap-Up coverage apply to the specific construction project only.
Over What Time Period is Coverage Provided?
Builders Risk coverage responds to property-related losses that occur only within the policy period shown on the declarations page(s), on or after the policy effective date and before the expiry date of the policy. It is imperative that the owner or general contractor (as well as the insurance broker) be well aware of the expiry date of Builders Risk coverage. Should there be any delay in the completion of a project, they may need to request an extension to the coverage on that policy.
A Wrap-Up Liability policy will typically follow the effective and expiry dates of the Builders Risk coverage and would respond to any covered loss that occurs during this time period. However, a unique feature of many Wrap-Up policies is the ability to add an extension for “Products and Completed Operations” coverage. This extends the “Products and Completed Operations” coverage of the policy for an additional time period (typically 12 to 24 months) after the project has been completed.
