Travelers Builders Risk Insurance Guide for Builders and Contractors

Travelers Builders Risk Insurance is a type of insurance that protects builders and contractors from financial losses due to accidents, theft, or natural disasters on construction sites.

This insurance is typically required by lenders or owners before construction begins, and it can be tailored to fit the specific needs of each project.

The cost of Travelers Builders Risk Insurance varies depending on the project's location, size, and scope, but it's often a small percentage of the total construction cost.

Builders and contractors can choose from various coverage options, including property damage, equipment loss, and business interruption.

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Travelers Builders Risk Insurance is a type of policy designed specifically for builders, covering a wide range of construction project categories.

Founded in 1853, Travelers is one of the oldest insurance providers in the business, but it's not stuck in the past – it prioritizes technological innovation to manage construction risk.

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Travelers offers nationwide coverage through local agents and covers various building types, including stadiums, arenas, bridges, and more.

The insurer's Construction Pak policy is a broad and customizable builder's risk policy that's designed to meet the unique needs of construction projects.

Travelers has a team of specialists who visit hundreds of work sites every month to help policyholders reduce risk through site-specific insights and recommendations.

This approach to risk management is a key part of what sets Travelers apart from other insurance providers.

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If you're involved in a construction project, you're likely wondering who needs Travelers builders risk insurance and why. Building owners, architects, engineers, contractors, and subcontractors all need it to protect themselves from potential losses.

Building owners, for instance, need it to safeguard their investment in the property. Architects and engineers involved with the project also benefit from this type of insurance, as it covers their work and equipment. Contractors and subcontractors, on the other hand, need it to protect their business and equipment.

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Here are some key parties that need Travelers builders risk insurance:

These individuals and businesses can suffer significant financial losses if their construction project is damaged or destroyed due to accidents, theft, or other unforeseen events. By having Travelers builders risk insurance, they can rest assured that they're protected against these risks.

The cost of Travelers builders risk insurance can vary depending on several factors, making it essential to compare quotes from different carriers and present an identical "picture" of your project to ensure accurate comparisons.

Many variables affect the price of a policy, so be sure to request quotes and present a clear picture of your project to different carriers.

The policy premium for a builders risk insurance policy can be broken down into physical damage and time element form coverages. For example, the policy premium mentioned in the article was $92,027, with $86,710 for physical damage and $5,317 for the coverages provided by the time element form.

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A significant policy coverage and limit to consider is the physical damage insurance limit, which can be substantial, such as the $24,461,157 limit mentioned in the article.

Here are some specific costs associated with a builders risk insurance policy:

The cost of builder's risk insurance can be a significant factor to consider when purchasing a policy. Business Owner's Policy (BOP) is not directly related to the cost of builder's risk insurance.

Many variables affect the price of a builder's risk insurance policy. The cost of your policy will depend on the specifics of your project.

To get an accurate quote, be sure you're comparing apples with apples and presenting an identical "picture" of your project to different carriers. This will help you compare policy fit against policy cost.

Supplementary Coverages are a crucial part of Builder's risk insurance, allowing you to tailor your policy to specific project needs.

Most policies need to be extended to include project-specific risks, which can vary greatly depending on the project's scope and location.

You may need to remove certain types of coverage to lower the cost of your policy premium, but be sure to carefully consider the potential risks involved.

Builder's risk insurance is a vast spectrum of property insurance coverage in construction, and customizing your policy is essential to ensure you're adequately protected.

The policy term for Travelers Builders Risk Insurance began on June 25, 2015, and ended September 30, 2016.

The physical damage insurance limit was a significant $24,461,157, with various sublimits, coverage extensions, and additional coverages applying.

A notable sublimit was the "soft costs" limit of $100,000, which was part of the policy's overall coverage.

The policy also included a declarations page for the Construction Pak—Builders' Risk Special Time Element Form, which provided a $1.5 million per-occurrence limit for "business income", "rental value", and "soft costs", subject to a 21-day waiting period.

Here's a breakdown of the policy's definition of "soft costs":

The policy premium was $92,027, with $86,710 going towards physical damage coverage and $5,317 towards the coverages provided by the time element form.

The policy term for this insurance coverage began on June 25, 2015, and ended on September 30, 2016.

The physical damage insurance limit was a significant $24,461,157, which covered various types of damages.

Sublimits, coverage extensions, and additional coverages applied to the policy, including a "soft costs" limit of $100,000.

The policy was modified to include a declarations for the Construction Pak—Builders' Risk Special Time Element Form, which provided a $1.5 million per-occurrence limit for specific types of losses.

This included business income, rental value, and soft costs, subject to a 21-day waiting period.

The policy defined soft costs to consist of the following types of expenses:

The policy premium was $92,027, which included $86,710 for physical damage and $5,317 for the coverages provided by the time element form.

When you're dealing with builder's risk insurance, it's essential to understand what's excluded from the policy. Employee theft is a significant risk that's not covered by builder's risk insurance.

If you're in the construction business, you're likely familiar with the importance of protecting your work vehicles. Unfortunately, damage to these vehicles is not covered by builder's risk insurance.

Builder's risk insurance typically doesn't cover damage from natural disasters like earthquakes and flooding. This is a crucial consideration when building in areas prone to these types of events.

Manufacturing defects, flaws in workmanship, or design errors are not covered by builder's risk insurance. This means you'll need to consider additional coverage or take on the risk yourself.

Ordinary wear and tear is another exclusion in builder's risk insurance. This can be a challenge when building structures that are designed to withstand heavy use.

Here are some specific exclusions to keep in mind:

The policy defines "Covered Causes of Loss" as "Risk of Direct Physical Loss or Damage." This means that the policy will cover losses due to physical damage, but not other types of losses such as business interruption or financial losses.

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The policy defines "Covered Property" as "Builders' Risk", which includes buildings or structures being constructed, erected, or fabricated at the job site. This also includes property that will become a permanent part of the buildings or structures.

However, the policy specifically excludes certain types of property from coverage. These include:

In addition to the above exclusions, the policy also provides coverage for "Builders' Risk Site Preparation." This means that if site preparation is necessary to prepare the site for construction, the policy may provide coverage for the cost of this preparation.

Travelers builders risk insurance policies can be complex, and disputes can arise when it comes to claims.

One key issue is determining who is eligible for coverage, as seen in the case of Downtown Lofts LIHTC LLLP v. Travelers Prop. Cas. Co. of Am., where the project owner was not listed as a named insured under the policy declarations.

Travelers may deny coverage for rental value and soft costs if the project owner is not an additional named insured, as was the case in BCC's claim against Travelers.

The policy defines "you" and "your" as only the named insured shown in the declarations, limiting coverage to the named insured.

This means that if the project owner is not listed as a named insured, they may not be eligible for coverage for rental value or soft costs.

Travelers relied on this same reasoning in denying coverage for Downtown Lofts' soft costs claim, which was similar to BCC's claim.

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