Home builders face numerous risks when constructing a residential property, not the least of which is damage to (or loss of) the tools they rely on for the job.
Home builders insurance, also called builders risk insurance, addresses many of the most common challenges teams encounter when constructing a structure; however, depending on the policy details, the level of coverage it provides for tools and other builder property may be limited.
Here’s what you need to know about coverage for tools and property in home builders insurance, how much protection you can expect, and how to fill the gaps to ensure your equipment is properly secure throughout your construction project.
Does Home Builders Risk Insurance Cover Tools?
The short answer is that a builder’s risk insurance can cover tools and property but may not. Research the details of any policy that you are considering. Some will provide inherent protection against theft, vandalism, and breakdown; others will not offer this protection within the builders’ risk policy.
Instead, it will be located in another policy add-on. Be aware that even if the builders’ risk insurance policy you choose does include protection for the property and tools you use on the job, that coverage is typically limited to items on the job site or on their way there. Tools left at your business location or placed in storage are not normally included under the protections of a builders’ risk insurance policy.
Filling the Gaps in Your Home Builders Insurance Coverage
If your builder’s risk insurance does not cover tools or its coverage needs to be more comprehensive than your business needs, your next best step is to fill the gaps in your coverage with add-ons and additional policies.
The good news is that these policies offer excellent protection in a multitude of arenas in many cases, so your construction business can benefit in more ways than one. Two of the most helpful insurance options for expanding your property and tool coverage during a home-building project are:
Commercial Property Insurance
Builder’s risk insurance that includes tools and property will cover these items when they are present at the job site or while you are in transit to the workplace. However, commercial property insurance is more comprehensive and extends this protection to items located at your business or in storage.
Commercial property protection safeguards against theft and vandalism just as home builders insurance does, but it also includes accidental damage and weather events, such as loss of equipment due to unexpected flooding.
As an additional benefit, commercial property insurance is an expansive type of protection, and it can even cover your business building. From damage to the building in the event of a fire to replacing the furniture customers use if stolen, commercial property insurance provides greater benefits than protecting the tools and equipment you rely on for your building projects.
Thus, expanding your insurance protection in this manner is typically a no-brainer. Commercial property insurance often goes hand in hand with business interruption insurance, which covers the cost of temporarily ceasing operations while you navigate covered property loss and recovery.
Home Builders Equipment Floater Insurance
Also called contractor’s tools and equipment insurance, floater insurance is a more expansive type of protection tailored explicitly to the tools that home builders use every day. It covers most damage types to your tools, excluding general wear and tear. Items must be less than five years old and worth less than $10,000, on average, to qualify for coverage.
Floater insurance is often offered as an add-on to commercial property insurance or business owner’s insurance, and the cost is typically only a few dollars each month. Importantly, floater insurance offers robust protections for rented equipment, which may be excluded from the coverage included in a standard home builder insurance policy.
If your company relies on rented equipment frequently, or if you are concerned about frequent theft or tool breakage, equipment floater insurance can be an inexpensive method of expanding the protection on your property.
Cover Your Tools and Property with Home Builders Insurance from Burton & Company
The tools used on the job site are non-negotiable for a home builder’s success on every project. To best protect those tools, look beyond the basic coverages offered in a home builder insurance policy.
The team at Burton & Company can tailor tool and property insurance coverage that suits the types of equipment you rely on the most while bundling policies to save you money where possible. Contact Burton & Company to share your home-building practices and collaborate on insurance coverage that easily addresses your most significant risks.
