Sometimes you need to buy a Builder’s Risk policy when doing construction projects and other times you don’t. If the coverage is required, it can be purchased by your General Contractor or by you.
When you do a new building project, the only coverage suited is the builder’s risk policy.
To obtain full and complete coverage you are required to purchase this before the foundation is complete.
When doing a renovation project or are simply adding equipment to the existing structure, the building insurance already in place may be all you need. Increase the limit, notify the insurance company of what you are doing and that is it. If you are increasing the rebuilding cost of the facility you will need to increase the coverage limit. Sometimes you are renovating what is already there so there is no need to increase the limit.
However, when doing a renovation and adding to the existing building at the same time it could go either way. Sometimes increased limit of coverage is required and yet other times a compete separate Builder’s Risk policy is required. It will depend on a number of factors.
It is recommended you increase the coverage limit prior to beginning the renovation in order to avoid being underinsured. It is also a good idea to check the existing building insurance policy to make sure the renovation project fits within the parameters of the current policy. Be sure to seek advice and purchase insurance from those who understand your business!