Property Insurance

Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways - open perils and named perils. Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism and war. Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage causing events as fire, lightning, explosion and theft.

Casualty insurance

Casualty insurance policies are written to cover losses that are the direct result of an unforeseen accident(s). It may include Auto liability insurance for car accidents, Marine insurance for shipwrecks or losses at sea, and etc. Life, health and property insurance are typically excluded from the definition. Loosely used to describe an area of insurance not particularly or directly concerned with life insurance, fire insurance or automobile insurance. Most frequently it refers to liability, crime and plate glass insurance but may include surety as well.

Builder's risk insurance

Builder's risk insurance is a special type of property insurance which indemnifies against damage to buildings while they are under construction.[1]

Necessity

Buildings are subject to many different risks while under construction. They may catch fire, be damaged by high winds, or fall victim to other force majeure. One common theory is that any new construction becomes property of the owner once it is located on the owner's site. The general contractor may be responsible for any losses caused by his own negligence, but the owner is responsible for most other losses. Builder's risk insurance indemnifies against some of these losses.

Coverage

Builder's risk insurance usually indemnifies against losses due to fire, vandalism, lightning, wind, and similar forces. It usually does not cover earthquake, flood, acts of war, or intentional acts of the owner.

Who buys builder's risk insurance?

It is usually bought by the owner of the building but the general contractor constructing the building may buy it if it is required as a condition of the contract.

Alternatives

If the project involves renovations or additions to an existing building, the owner's existing property insurance may cover the work under construction, obviating the need for builder's risk insurance. (Policies vary.) However, in the case of new buildings under construction on vacant sites, the owner may not have an existing policy that provides coverage.