Texas General Lines — Property and CasualtyCommercial LinesMedium
A client is constructing a new 10-story office building. They need insurance that will cover the structure itself, as well as materials and equipment on-site awaiting installation, against perils such as fire, windstorm, and vandalism during the construction phase. Which type of policy is most appropriate for this scenario?
- ABuilders Risk Coverage
- BCommercial Property Building and Personal Property Coverage Form
- CBusiness Income and Extra Expense Coverage
- DInstallation Floater
Show answer & explanationAnswer & explanation
Correct answer: A. Builders Risk Coverage
Builders Risk Coverage is specifically designed to protect buildings under construction, including materials and equipment on-site, from various perils until the project is completed.
Why the other options are wrong
- B. This form covers existing structures and their contents, not buildings under construction.
- C. This coverage protects against loss of income and extra expenses due to business interruption, not physical damage to a construction project.
- D. An Installation Floater typically covers equipment and machinery from the time it leaves the supplier until it is installed and tested, usually for single items or smaller projects, not an entire building.
Builders Risk Coverage
A specialized form of property insurance that covers buildings and structures while they are under construction, including materials and equipment on-site.
- Covers property during the construction phase.
- Protects against perils like fire, wind, vandalism.
- Coverage typically ceases when the project is completed and occupied.
Memory trick: Building a project needs a 'Builder's' shield.