Builders Risk Insurance in Illinois

Every construction project is subject to issues that could cause delay or outright incompletion. The contractor might be held financially responsible in these situations, which is why most contractors in Illinois working on sizeable construction projects should have builders risk insurance.

Builders risk insurance is a specialized coverage designed for construction projects. It might provide financial assistance when there's an unexpected disruption in work.

Illinois contractors should consider builders risk if they work on larger construction projects within the state. If delay or incompletion would result in major costs, coverage is probably recommended.

Policies are most often purchased by developers, general contractors and sometimes larger subcontracting businesses. Property owners or lenders might occasionally purchase coverage, but they more often stipulate that the hired contractor gets it.

One of the important protections that most builders risk policies include is protection for assets at a construction site. These policies typically cover equipment, supplies, and work-in-progress, with specific coverages varying. Protection might extend to:

Structures under construction

Completed structures

Major equipment and machinery

General equipment and tools

Construction materials and supplies

Exactly what structures are covered can especially vary among policies. Contractors who want this specific protection should work with a specialized insurance agent. An agent who's well-versed in builders risk policies will know how to best insure in-progress and completed structures.

Builders risk policies can cover most larger construction projects. Contractors may get a policy when building multi-family residential buildings, retail spaces, industrial facilities, offices and more. Policies are also usually available for substantial renovation projects, additions, landscaping or hardscaping.

While builders risk policies are available for residential developments, they're not commonly used for individual houses. These tend to be much smaller jobs than what builders risk typically covers.

If coverage for a single-family house is needed, however, an insurance agent specializing in builders risk may be able to find one.

Builders risk policies typically cover a spectrum of peril. Commonly covered risks include adverse weather events, water damage, fire and smoke, vandalism and theft, and others. Precisely what a specific policy covers depends on that policy's terms.

Builders risk policies are available for multiple projects, but not all policies are able to cover more than one project. There are a few different policy types that might be appropriate:

Single Policy - Typically covers one new construction, remodel or installation project.

Reporting Form Policy - Typically covers multiple new construction projects, either residential, commercial or a mix.

Blanket Deposit Premium Policy - Typically for contractors with 25 or more new construction projects annually.

Blanket Installation Policy - Typically for trade contractors with regular remodel or installation projects.

A policy extension may be available when there are manageable delays that don't justify an actual claim. Many policies have a limit of one extension, after which a new policy might be needed if work still isn't finished.

Contractors that need an extension or new policy should consult with a knowledgeable insurance agent, who can help determine the best coverage solution for a project.

The cost of builders risk policies varies, with premiums being affected by factors such as the project's scope, size, location, equipment utilized and overall expenses.

To determine the cost of a specific project, contractors can get several custom quotes by working with an independent insurance agent. Independent agents are able to request custom quotes from several insurers.