Summer is in full swing, and your construction crew is progressing tremendously on a residential building project. It is on budget and ahead of schedule.
Your team is nearing the finish line with only a few tasks left. The property owner is delighted with the work thus far, as you’ve kept them apprised of developments along the way.
Your team finishes work for the week, but while packing things up and securing the property before departing, a bucket containing oily rags is overlooked and accidentally left sitting inside the garage of the building.
It’s July, and the temperature is sweltering over the weekend. As the heat rises inside the garage, it reaches a flash-point temperature, and the oily rags spontaneously combust. The fire spreads from the garage to other parts of the structure, destroying the excellent work your team has done and the remaining materials on-site you need to complete the project. Now what?
You can relax if you have course of construction (COC) insurance.
Let’s explore what this insurance covers, how it compares to builders’ risk and contractors’ all-risk insurance, and how the annual premium is determined.
What Does Course of Construction Insurance Cover?
A COC policy covers a property and your construction materials from a broad range of risks, including:
- Fires, explosions, and lightning strikes
- Windstorms, hail, excessive rain, natural disasters, and floods
- Burglary, theft, vandalism, and damage caused by malicious acts
- Damages resulting from the impact of a vehicle or an aircraft
- Subsidence or the collapse of a structure under construction
While this policy is a must-have for builders and renovators, it won’t cover everything you need. For example, a course of construction policy doesn’t cover your tools and equipment. For that, you need tools and equipment insurance. Likewise, you need a commercial auto policy for your company’s vehicles.
Course of Construction Insurance vs Builders’ Risk Insurance
It’s not uncommon for contractors to wonder if they need COC or builders’ risk insurance. So, let’s clarify that COC insurance is builders’ risk insurance. It is a form of property insurance that protects contractors and property owners from the start to finish of a construction project, be it residential, commercial, or industrial.
Course of Construction Insurance vs Contractors’ All-Risk Insurance
The primary difference between COC insurance and contractors’ all-risk insurance is in the scope of what each covers.
COC insurance focuses on specific property aspects of a construction or renovation project. It’s designed to focus on property damage with limited or no liability coverage.
Contractors’ all-risk insurance is more broad. It covers all parties involved in the project, ensuring comprehensive coverage for property and liability risks.
What Does Course of Construction Insurance Cost?
When it comes to the cost of an annual COC insurance policy, there are two things to bear in mind:
- The cost of a COC insurance premium varies by the insurer and your business’s details, services, and the project at hand.
- Basing your purchasing decision on the lowest price isn’t necessarily the best way to go.
An insurance company determines the cost of a COC policy after considering several factors, including:
- The project’s cost and the type of project (residential, commercial, industrial)
- The overall value of the structure you’re building or renovating
- The location of the property you need the policy for
- Where your business is located and the services you provide
- Your years of experience
- What your insurance claim history is
When shopping for an insurance policy, it’s crucial to consider the coverage limits and exclusions, rather than just the price. This way, you can ensure you’re getting the best value for your business insurance policy.
Let our friendly team take the hassle of getting the coverage you need off your hands. We’ll shop our partner network of over 50 insurers to get you the course of construction (or builders’ risk) insurance you need so you can concentrate on hitting the nail on the head and delighting your customers.
– Updated July 3, 2024.
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