Commercial New Construction Insurance

Commercial builders risk coverage is not just for small shops or offices. Common businesses and entities eligible to secure builders risk insurance include warehouses, wastewater treatment facilities, municipal buildings, institutional properties, stadiums, bus stations and more. Commercial builders risk insurance can also provide coverage for installation of light poles, benches and playground equipment at city parks, to name a few.

Although apartment buildings and condominium buildings typically operate as residences, these structures are considered commercial properties when more than four units are involved. In addition, when the property under construction will be used for business and residential purposes, insurers may often consider it a commercial project.

With commercial construction projects, clients are typically motivated to begin using the constructed facilities as soon as they can do so. When a commercial builders risk policy includes an occupancy clause, clients may be able to use the portion(s) of the structure that are completed while construction on other sections is still underway.

For example, a client building a strip mall may want to allow one tenant to begin operations as soon as their space is ready, even if the rest of the mall has yet to be completed. With the US Assure Builders Risk Plan insured by Zurich, policies issued on our automated form include a 90-day occupancy clause, and manually underwritten policies include a 60-day occupancy clause. Additional days can be extended with underwriter approval, and the occupancy endorsement can be added onto the policy after it is already in effect.

Cost-conscious commercial builders risk clients may be interested in excluding site work from coverage. Site work refers to work such as landscaping, underground piping, installing sprinkler systems and similar activities for which clients don’t feel they need the full protection builders risk insurance offers.

Under the US Assure Builders Risk Plan insured by Zurich, site work may be excluded, depending on the coverage form selected. With that said, agents should always discuss the potential ramifications and risks of excluding coverage with their clients. If site work is excluded and a loss occurs, the client won’t be able to collect claims dollars for the cost of the excluded site work.

Payment options vary from provider to provider, so agents should fully understand available choices. As is the case with most commercial builders risk policies, the US Assure Builders Risk Plan insured by Zurich offers direct billing, where the client is invoiced directly and responsible for submitting the premium payment(s). As an alternative, wholesale billing arrangements may be available, allowing the agent to submit premium payments on behalf of their client. The option to pay in installments is also commonly available.