When insurance companies issue a policy–such as in the case of builder’s risk coverage–they take on an assumed amount of risk. This goes for car insurance, health insurance, life insurance, or any other insurance. When an insurance companies issue a policy, they assume the risk of something happening that makes an individual call on that policy.
A car accident. A health emergency. A death. And others.
Take the case of builder’s insurance.
Builder’s risk insurance is a specialized form of property insurance, which protects against damage to buildings while they are still under construction. Its protects against damage to insurable assets: materials, fixtures, or equipment being used in the construction or renovation of a building or structure is those materials are damaged by a covered cost.
Builder’s risk insurance often covers against events that may happen in the course of construction that are difficult to predict or prevent. These include natural elements such as wind or fire, and criminal elements such as theft or vandalism. Environment may play a role, as a beach property may not be insured from wind or flood.
These policies do not cover accidents or injuries at the workplace and they are set to terminate at the end of the construction process of the building. The smart move for builders is to have the policy in effect before the first materials are shipped to the construction site and for the policy to terminate after the end of construction.
After builder’s risk insurance expires, the new owner should generally take on a permanent property insurance policy.
Generally, builder’s risk coverage is written for a period of one year to cover a new building or structure under construction or an existing structure undergoing additions, alterations, or repair. This one year period can be renewed if the construction takes longer than one year.
Generally, it is the general contractor or the construction company that purchases builder’s risk coverage, though it is sometimes purchased by the property owner. Many counties or municipalities need to see proof of builder’s risk coverage before construction on a property can commence.
With all that said, there are some companies that run afoul of certain regulations. They may have an accident that is difficult to cover or is open for interpretation by the insurance company and the construction company. There may be a matter of issue–something may happen where each points to a different thing at fault.
In that case, the general contractor may ask for insurance to cover the cost of damage but the insurance company may refuse. The claim may be denied and the general contractor may be stuck with thousands, sometimes hundreds of thousands, of dollars in damage. In this case, the contractor may ask, “When do I need a Construction Attorney?”
In 2015, the American Arbitration Association administered 551 construction industry cases with claims of $500,000 or more. The largest mediated construction case was for $2.6 billion, while the largest arbitration case was for $96 million. The total value of all claims and counter claims in 2015 was $5.5 billion.
You may ask yourself, “When do I need a lawyer?” or “When should I consider an employment law firm” or even “Why does my business need an attorney?”
All very valid questions. First, when seeking out attorneys, it’s important to ask yourself the following question.
Ask yourself, “Have I been involved in a dispute with an insurance company regarding damages covered within my builder’s risk coverage?” If the answer is yes and you feel like the insurance company denying coverage that they should be covering, then look through attorneys and find one that suits your needs.
Ask yourself, “Is my claim valid enough to have a strong case in court?” Attorneys will be able to figure this out with you, though it’s possible that your case is strong enough and you are knowledgeable enough to figure it out on your own.
Ask yourself, “Is the damage that is not being covered by the insurance company worth the cost of taking the case to court?” Many attorneys will work pro bono on cases like this, as the payout from the settlement is likely to be large. Find an attorney to suit your needs will hep you win the case. More on this.
