Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Property InsuranceEasy
A contractor is constructing a new commercial office building. They need insurance to cover the structure itself, building materials, and equipment on-site during the construction phase. Which type of policy is most appropriate for this specific need?
- AEquipment Breakdown Policy
- BCommercial General Liability Policy
- CCommercial Property Policy (BPP)
- DBuilders Risk Policy
Show answer & explanationAnswer & explanation
Correct answer: D. Builders Risk Policy
A Builders Risk policy is specifically designed to provide coverage for buildings and structures under construction, including materials and equipment associated with the project, against perils like fire, wind, and vandalism.
Why the other options are wrong
- A. Equipment Breakdown covers internal mechanical/electrical failures, not the construction project as a whole.
- B. Commercial General Liability covers third-party bodily injury and property damage, not damage to the project itself.
- C. A standard Commercial Property Policy covers existing buildings, not those under construction.
Builders Risk Policy
Insurance that covers physical damage to a building and materials during its construction.
- Covers the structure, materials, and equipment on-site.
- Coverage typically ends when construction is complete or building is occupied.
- Can be written for the owner or the contractor.
Memory trick: For new builds, Builders Risk yields the shield.