How Builders Risk Insurance Protects Your Tools and Materials

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Do you know that builders risk insurance does more than protect the building you are working on? Most contractors understand the value of a builders risk policy when it comes to the building itself; after all, paying out of pocket to repair a damaged structure could be devastating to your budget. But the protection of builders risk coverage goes beyond the structure, protecting the materials and equipment you need to complete the project itself.

Protecting Your Tools & Equipment on the Project Site

Your equipment is important to you, and it’s critical for getting the job done. And it doesn’t always make sense to transport your tools and equipment to and from the project site every day either. Your builders risk insurance coverage extends to your equipment, protecting your tools from many of the risks they face while they are on the site.

Let’s say you are renovating a residential home, adding a new master suite above an existing garage. You’re leaving some compressors, table saws, and other tools locked in the garage at the end of the day.

Or so you thought.

When you arrive at the project site one morning to find the unlocked garage door wide open, and your high value tools missing, your builders risk policy will most likely cover the loss. (Which is a relief, since your client’s homeowner’s policy isn’t going to foot the bill.)

The new excavator that you bought this year has been a sound investment. But when you drive by your project site on a Sunday morning and see that it is gone, you can’t help but start calculating the costs even as you call the authorities and report it stolen.

If you have builders risk coverage, the loss gets a lot less complicated. Instead of adding up what it will cost you to replace the heavy equipment, plus the other soft costs associated with the theft, all you need to worry about is filing a claim and paying your policy deductible.

Your builders risk policy is your safety net that protects your tools and equipment stored on a project site.

Protecting Your Materials & Supplies On- site

You’ve won the bid for a new construction commercial retail space, and your contract states that you are responsible for obtaining a builders risk policy (with your subcontractors added as named insureds). You’ve begun work, and everything is right on schedule.

Unfortunately, one morning you arrive on site to find that your metal materials have been stolen off the project site. Copper wiring, aluminum I-beams and flashing that you thought were securely locked up are now gone without a trace.

Construction site theft is nothing new. Theft and vandalism are the most common crimes in construction, and replacing expensive materials or stolen equipment can lead to substantial unforeseen project costs.

Protecting Your Off-site Materials & Supplies

What about the materials and supplies that haven’t made it to your project site yet? You may not realize it, but you can add coverage for materials in transit to your builders risk insurance policy. And if any of the following circumstances happened to you, you’d be glad you did:

  • A load of ceramic tiles falls of a truck on the way to your project site, shattering all over the freeway.
  • Your insulation materials are stored off-site, but a leaky ceiling and sudden rainstorm causes irreparable water damage before they can be installed.
  • The copper wiring being transported to the project site is stolen right off the truck in broad daylight at a gas station.
  • Vandals have a field day expressing themselves artistically, “decorating” the cement masonry that you’ve stored off-site with spray paint.

Adding coverage for materials in transit to your builders risk insurance can give you an extra layer of protection against unexpected risks to your tools, equipment, supplies, and materials. Because it’s not always the materials that have already made it to the site that need protection.

Construction site theft and vandalism are, unfortunately, all-too-common. Unforeseen emergencies, like an electrical fire, can happen to anyone. Mother Nature could unleash a destructive windstorm, or hail the size of baseballs without notice. These are risks that every contractor faces on every project.

Replacing the materials, supplies, equipment, or tools needed to complete a job in the face of one of these situations could be devastating to your project budget. If you had to reach into your own cash reserves to replace stolen equipment or vandalized supplies, it could eat up all of your profits or worse. Luckily, your builders risk policy can extend protection to your tools and materials, on site, off site, and even in transit.
Construction Insurance

What Determines Your Builders Risk Insurance Cost?

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You know that no two projects are ever the same. Which is why there is no standard builders risk (course of construction) policy… and no easy formula for determining your policy costs. You can, however, have a good understanding of what your insurance provider is looking at when they calculate the risk factors of your project, and what exactly goes into your policy price.

Here are some of the factors which may be used to determine your builders risk insurance costs:

Which Parties will be Insured?

The builders risk coverage for a project is generally obtained by the owner/ developer or general contractor. In addition to providing coverage for the general contractor and owner, the policy should also cover any subcontractors (this eliminates the need for waivers of subrogation between contractors and subs). Any person whose materials, supplies, and time is going into the project has a valid insured interest, and is most likely to be listed. If there is a loan issued, the Bank may also be listed as an Insured Party on the policy.

Did you know? If one of the parties listed on the policy has filed bankruptcy in the last 10 years, it may have an affect on the policy costs.

What Property will Your Builders Risk Insurance Cover?

A builders risk policy is a very unique type of property insurance, so it should be no surprise to hear that property is a big consideration for the policy costs. Whether the project is new construction or a renovation on an existing structure, and even the size and square foot of your project scope can factor into your overall costs.

The “property” considerations that can affect your policy costs include:

Existing Structures

What is the value of any existing structures? Many policies provide actual cash value coverage for the existing buildings, and replacement cost coverage may increase your policy costs. Other risks that may increase your costs include existing structures with a value more than double the value of the new work.

New Construction

Insuring your property on a new construction project may include coverage for foundations, site preparation, excavation, underground pipes, and temporary structures.

Building Materials

Your policy may cover materials such as fixtures, supplies, and even tools and equipment. The actual materials you are using on the project can have an affect on your overall policy costs. Your costs may increase, for example, if you are using unconventional materials and supplies, such as earthen materials, fabric structures, or wooden frames rather than steel.

Off-site Property

What about the materials that haven’t arrived to your project site yet? Additional coverage for your builders risk policy can protect materials in transit, or even materials stored off-site. If a fire breaks out in the storage facility where your materials are stored, or if they are damaged on their way to the project site, this additional coverage will be worthwhile. Additional protection for off-site property will factor into your overall policy costs.

Which Perils will Your Policy Insure Against?

What’s covered in your builders risk policy? Most policies are written on an “all risk” basis, which means anything is covered unless it is specifically excluded in your policy. However, some of the more common exclusions on a policy can be added in as supplemental coverage. So your policy costs may change depending on whether or not you add items such as Earthquake Coverage or Flood Coverage for your project.

Does Your Builders Risk Insurance Include Soft Costs?

If your project was delayed due to a covered peril, the cost of covering your “property” is only the part of the picture. There may be a risk of economic losses from the resulting delay, such as the costs of keeping workers on site, extended equipment rentals, increases in labor wages, or even additional storage costs. If you want to ensure against economic losses from a project delay, you may need to add a “soft cost” endorsement to your builders risk policy. Adding this endorsement to your policy can increase your overall costs.

Additional Factors that Determine Builders Risk Insurance Costs

We’ve covered your basics, such as the parties, property, and perils insured on your policy. What else is considered when calculating your policy costs?

  • Time Elements: How long will the term be on your policy? Builders risk coverage is available for various time frames, and a term greater than 12 months may increase your costs. Another time element to factor is if the construction project has already started more than 60 days before coverage begins.
  • Location: The specific geographic location of the project may impact the costs of your policy, depending on the risks associated with that area. Construction within range of wildfires, in a flood zone, or in Tornado alley, for example, could significantly increase your coverage costs. Projects with close proximity to coastal waters or brush may have higher premiums than a project outside of those areas. Your rates can even vary depending on the state in which you are building.
  • Type of Construction: A single-family residential home will generally have coverage costs less than a multi-family residential residence, or even a commercial project. The project type may be one of the biggest, if not the most simple, consideration when determining your policy costs.
  • Deductibles: Like any other construction insurance policy, the amount that you pay in premiums can be affected by the deductible limits you choose. Generally, selecting a higher deductible can lower your monthly premium payments. If you want to lower your premium amounts, select the highest deductible that you are able to pay.

With so many elements that go into constructing a builders risk policy, and so many changing variables to consider, it is no wonder there is no “standard” formula for pricing. The best way to determine your builders risk insurance costs for your next project is to contact an experienced construction insurance professional to discuss your project needs and receive a quote for your builders risk policy.

How to Find Out What’s Covered In Your Builders Risk Policy

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Insuring your construction project with a builders risk policy is crucial to protecting your business. And just like your projects, no two policies are the same. So it is important to know what’s covered in your policy for any given project to avoid unexpected surprises if you need to file a claim.

Standard Builders Risk Policies are anything but…

Why isn’t there one standard policy to protect your project? The coverage on a builders risk policy, also known as course of construction, varies greatly because no two projects are ever the same. Each project will have it’s own set of risks and exposures that the coverage is tailored to match.

The estimated completed value of each project is used as the limit of insurance, and the coverage is typically written on an all risks basis (more on that later) which covers the construction site property, as well as off-site storage locations and property in transit. These ever changing variables from project to project make this a unique type of coverage where a “standardized” policy would be an exception, not the rule.

Even though your coverage will be different depending on the variances from project to project there are still some pretty general things that will be outlined in your policy. Here’s what you should look for when reading the policy fine print for your latest project.

Who are the Covered Parties?

General contractors or owner/ developers are typically the person who purchases a course of construction policy. No matter who sets up the coverage, however, the covered parties should include:

  • Project owner
  • General contractors
  • All subcontractors
  • The Bank (if there is a loan issued)

The covered parties should be included in the policy as “named insureds.” General contractors and subcontractors have just as much to lose in an unfortunate event as a building owner during the course of construction, and they have a valid insurable interest as their materials and labor go into the project.

Another reason all parties with an interest in the project should be included in the policy is to prevent the insurer from attempting to recover losses that may be the result of a subcontractor or general contractor negligence.

The project bid documents and contract should clearly state who is the responsible party for obtaining the policy, who is responsible for paying deductibles, and a formula for determining when one of the parties is liable for a deductible.

What is the covered property?

Your policy’s description of covered property will normally include more than the building or structure itself. Your covered property will most likely also include materials, supplies, and fixtures as well, and may be extended to include the machinery and equipment needed to complete the job. Depending on your project and your individual policy, your “property” may also include:

  • Temporary work structures
  • Office trailers
  • Fences
  • Sidewalks and other hardscapes
  • Landscaping
  • Scaffolding

Don’t assume that everything stored on the project site or used off-site is covered, read your policy carefully to see exactly what your covered property includes on each and every project.

Are soft costs included?

Soft costs are expenses that may be lost during the time it takes to repair, replace, and move forward with a project if the worst-case scenario occurs. Costs associated with the project delay may include the costs of “business interruption.”

These soft costs may include

  • Insurance premiums for builders risk and possibly general liability coverage
  • Legal fees
  • Construction loan interest
  • Real estate and property taxes for the project site
  • Loss of rental income
  • Advertising expenses

Every policy is different, and soft costs may not be included in your policy without supplemental coverage. Read your policy, and consult with your insurance carrier to be sure.

What’s not covered in your policy?

A course of construction policy is typically written on an “all risk” basis, meaning everything that could go wrong is covered unless your policy specifically excludes it. If your coverage is “all risk,” be sure you know what your specific policy’s exclusions are. What’s not covered in your policy is often as important as what is.

Common exclusions found on a builders risk policy include intentional damage, wear and tear, acts of terrorism, nuclear risks, war or military action, and even some acts of nature. Your policy may exclude floods or earthquakes, for example. Your insurance carrier may offer you supplemental coverage for some of the excluded perils for additional protection, so if your project is located in a flood zone you won’t be left out to dry.

What are your limits?

The builders risk policy limits will be written for the full value of the completed construction project, and should include soft costs and the materials and supplies included as part of your covered property.

When is coverage terminated?

Coverage can be written for 3-months, 6-months, 12-months, or longer terms. Most policies will include a specific provision for the termination of coverage. If your policy contains an occupancy clause, that means that coverage is terminated when someone takes whole or partial occupancy of the project site. Other termination clauses in your policy may include:

  • Formal acceptance by owner.
  • Building is put to intended use.
  • Policy cancellation or expiration.

Keeping track of exactly what is covered in your builders risk policy may seem like a daunting task, but reading (and understanding) what is in your policy can only benefit you in the end. Since every project is different, and every policy is different, you need to know who is covered in each unique circumstance, what your property includes, what your exclusions are, and what could cause the coverage to be terminated.

Your insurance broker can help you understand the language and details of your policy, so don’t hesitate to go over the fine print in detail with someone who knows.

Builders Risk: What Profitable Contractors Know

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Sometimes the difference between a contractor who can successfully grow a profitable company and one whose business flounders is a little bit of know-how. A savvy contractor knows how to handle the risks associated with a project, and how to protect himself with the right insurance policies. Profitable contractors know a thing or two about builders risk insurance, and how to get the most out of their policy.

Builders Risk is Better for Bids

Who is responsible for the policy, the owner or general contractor? Without knowing who will be supplying the insurance coverage, it’s almost impossible to provide an accurate bid. If the contractor is supplying the coverage, is he also paying the premiums, retaining the deductibles, and handling claims?

An experienced contractor knows that these important discussions need to happen in pre-bid meetings, and clarifications need to be provided in bid documents in order to remove uncertainty from the bid process.

“Master” the Owner-provided Policy

In the event that an owner is providing the policy, a contractor who wants to protect his business assets will need to take some additional steps, such as obtaining a copy of the owner’s policy.

You want to make sure you, and any of your subcontractors, are named insureds on their course of construction policy. Review the deductible amounts, and always make sure that the policy is in effect before you or any of your subs set foot on the project site.

Some contractors prefer to secure “master” policies to protect themselves from losses due to an owner-provided policy. By carrying a master policy, you are able to offer a ready-made builders risk policy to owners.

If the owner refuses and chooses to get their own policy, you can use your policy to fill in the gaps of the owner-provided policy if necessary.

Don’t forget to consider Soft Costs

A course of construction policy protects your project from the unintended consequences of unforeseen events. But did you know that it can also protect you from some not-so-obvious losses, such as business interruption losses and soft costs?

Delays in construction might cost you overtime wages to employees, additional interest on project-related financing, or added rental fees for equipment that is not being used during repairs. These “soft costs” can be insured, but they are not always included in a standard policy. Adding a soft cost endorsement to your policy to provide extra protection to your business.

Remember: One size does not fit all

Different projects will require different course of construction coverage. Don’t fall into the trap of thinking that one policy is a good fit for every project you take on. A renovation project, for example, should have builders risk coverage for both the replacement cost of coverage of the existing structure and the new construction. For new construction, your policy should cover site preparations, excavations, foundations, underground pipes, scaffolding, construction forms, and temporary structures that would be expensive to replace if something unexpected occurred.

The key to running a successful, profitable construction company is protecting yourself from the risk of big losses from unforeseeable events. Many contractors may utilize builders risk insurance to protect themselves, but the most successful contractors will know how to take this coverage and maximize it to fully protect the business they’ve worked so hard to build.

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5 Risks Savvy Contractors Know to Avoid (and You Should Too)

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5 Risks Savvy Contractors Know to Avoid (and You Should Too)

Risk. If you work in the construction industry, it’s a word you know well.

Everything you do in your work as a contractor has an inherent risk factor, from your bid to completion of the project.

In construction, risk is the probability of a loss occurring. You may think your general liability policy is enough to safely protect you, but you may be surprised where additional losses might pop up.

Savvy contractors know all the major risks, and how to avoid them.

Risk #1: Theft or Vandalism

You need your tools, equipment, materials, and supplies to get the job done.

No matter how carefully you maintain your tools, or how cautious you are about securing equipment and materials, it is almost impossible to protect these assets 100%.

Maybe one of your employees accidentally takes a tool home with him, and it never returns to the site.

Whether it is accidental or intentional, theft happens.

And so does vandalism.

Replacing tools and equipment that have been stolen or damaged can eat away at your profits on a project.

Risk #2: Other People

One of the biggest safety risks on your project may not even be one of your guys.

Interference from people outside of your immediate sphere of influence is tough to predict.

How many times has a homeowner’s neighbor come over to check out the new remodel project?

You know the type…

Nosey Ned pretends to take the dog out for a walk so he has an excuse to wander to the project site. He likes to tell you all about the upgrades he has made in his own home, give you some advice on how to do your job right, and then…

He trips over an extension cord connected to a power tool and falls down.

Now, Nosey Ned has lawyered up and expects you to pay for his curiosity and clumsiness. Third-party lawsuits can cost you big-time. Even if you aren’t found liable in court, the cost of a lawyer and all of the fees could be huge.

Risk #3: Data Loss

Welcome to the age of construction technology.

The conveniences of smartphones, tablets, and software programs to your business can mean increased convenience and profitability for your business. You use accounting software, an app for finding bids, a system for tracking leads, and even a project management program that you access on your tablet.

The computer equipment, data systems, and information storage you use daily makes you more efficient and more profitable.

What would it cost you if something happened to your computer equipment and data? Aside from the simple cost of replacing these valuable (and usually pricey) tools, data breaches and stolen equipment leave your accounts, and your client’s personal information, vulnerable.

Risk #4: Stormy Weather

Rain. Hail. Winds. Unexpected and severe weather can happen in an instant.

High winds can uproot trees, sending them crashing through your remodel project. Lightning can strike. Hail the size of golf balls can pelt down and damage materials and supplies. Severe rains can turn to floods.

It can be hard to think about the potential risk of a flash flood when the sun is shining, or to imagine the damage that high winds can bring on a mild, spring day.

But unexpected weather extremes, and even natural disasters, can happen without warning.

If one of these events happened and caused serious damage to your project, materials, and supplies, you could be facing the repair and replacement costs out of your own pocket.

Risk #5: Yesterday’s Project

As a contractor, you face a unique risk that not many other professionals have to worry about. Even after you have completed a project, it still continues to present a risk for you and your business.

If a project you completed months, or even years, ago injures someone because of a construction defect, you could be left holding the bill.

How to be savvy about protecting your business from construction risks:

If any of the above scenarios sounds like it could bring a huge loss to your business or personal assets, don’t panic.

You can protect yourself from all of these risks.

Here’s how contractors in-the-know avoid them:

  • Protect your tools and equipment on the way to a jobsite with tools and equipment coverage.
  • Protect your business from lawsuits and legal fees with general liability coverage.
  • Protect your computer equipment and data with inland marine coverage.
  • Protect your project, materials, and supplies from unexpected weather and disasters with builders risk coverage.
  • Make sure there are no lapses in your insurance coverage. Many policies write in a “prior work” exclusion, so if you are switching carriers to save money, it may cost you in the end.

The most successful contractors didn’t get that way by worrying all day. They plan proactively to protect their business from risks. Calculate risk, have a great plan for managing that risk, and cover yourself where you can.

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Course of Construction: Protecting Your Project While It’s in Progress

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A new construction project is a daunting endeavor. Whether you’re a first time home builder, an established general contractor, or a large commercial developer, the decision to tackle a large scale project is a huge risk. There are so many things to think about regarding permits, budgets, materials, construction timelines, payroll, etc. and the list goes on.

The last thing you want is something happening to the project before it’s complete. What if your materials are stolen? What if (heaven forbid) a fire breaks out and ruins the new framing that was just completed? That’s where a course of construction policy can protect your investment.

What is a Course of Construction Policy?

A course of construction policy, also known as a builders risk policy, is given away in the name: it protects your project while it’s in the course of construction. From the first moment you start to lay the foundation, to the interior finish work wrapping up the project, this insurance has your back for those worst case scenarios.

What Does a Course of Construction Policy Actually Cover?

This type of policy ensures that you won’t have to come out of pocket to replace those materials that are to become a part of the finished home or commercial building. This includes foundation materials, rough lumber, finishing trim, and everything in between. Coverage is also extended to material in storage waiting to be put to use and material in transit.

Do These Policies Only Cover New Construction Projects?

While most policies are written to cover new construction, builders risk can also be written to cover existing projects and/or residential and commercial additions. Coverage can even be extended to the existing structure so if something happens in the new section and spreads to the existing section, you’re covered.

Construction Insurance

How Does Course of Construction Protect Remodeling Contractors?

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You are halfway through completion on a renovation to a residential home. Gale force winds send giant trees crashing down, torrential rains flood the area, and hail strikes the earth with the force of a hammer. In the morning, the damage is done. Your remodel has experienced extensive damage and your materials left on site are ruined.
Worst-case scenario, a situation like this one will cost you.

You will have to pay your employees to clear debris from the site, and to repair damage done by the wind, hail, and water. Once you have cleaned up the mess, you will need to replace the raw materials that were damaged. The profit margin for this project dwindles further and further as you repair and replace.

One unforeseen storm, unexpected and out of season, has caused this project to be a complete loss for you.

You can’t walk away.

You have a contract and performance bond that assures you will complete it.

Now imagine a happier scenario:

The morning after the storm, as you stand in the midst of the damage in ankle deep water surveying the ruins of your project, you pick up the phone.

Dialing your insurance company, you call in a claim.

The damage is covered under your Course of Construction policy. The costs of clearing debris, replacing materials, and getting back on track with your project will not come from your pocket.

You calmly explain to the homeowners that, despite being a bit behind schedule, the project will continue to move towards completion. The claim is processed quickly and you get back to work on your project.

For remodeling contractors, course of construction insurance can save the day.

When remodels and renovations are your specialty, you know that anything can and will go wrong. Vandalism, theft, natural disasters, and accidents that happen to your project while you are working on it can either ruin your chance of profitability on your remodel, or they can be a small bump in the road.

Course of Construction (also known as Builders Risk) policies reduce your financial risk in one of these unforeseen circumstances.

Builders Risk protects you from worst-case scenarios such as:

  • Fire
  • Wind
  • Burglary and Theft
  • Lightning
  • Hail
  • Explosion
  • Vandalism
  • Flood
  • Earthquake

What about materials not stored at the project location? Builders Risk will cover your materials when they are in transit or even in storage at a different location. You are protected in the case there is a fire at your storage facility, or if materials are stolen on their way to the site.

Watch out though!

While materials are covered under a builders risk or course of construction policy, your tools and equipment are not. Check out our page on tools and equipment insurance (inland marine) to find out how you can protect the tools of your trade.

Your coverage also extends to your client’s existing structure, and not just their new addition or renovation. When you bid on the job, you can offer your client the peace of mind that, should something unexpected occur that causes damage, their house is protected by your plan during the construction phase.

Beginning a remodel project without Course of Construction coverage is putting your project and profitability at risk.

You can manage this risk by protecting your profits and your business from the worst-case scenarios by carrying Builders Risk insurance policy.

Construction Insurance

5 Ways to Get Lower Rates on Your Contractor Insurance

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Independent contractors and small business owners know that the best way to improve cash flow is to bring more cash in, and pay less out. Sounds simple enough, but the costs of doing business can’t always be negotiated down.
One way you can reduce your operating costs is by lowering the rates you pay on your contractor insurance.

Here’s how to pay less, without giving up coverage.

#1. Review Your Current Coverage

The first place you can look to lower your insurance rates is on the policies that you already carry. If you have fewer employees, have sold equipment, or have retired vehicles from use, you may be able to find potential savings in your current policies.

Be on the look out for these changes:

  • Employee roster
  • Equipment bought or sold
  • Vehicles no longer in use
  • Type of construction work performed

Any changes in your business could mean a lower rate is available. Examine your existing policies, or talk to your broker to see where you can save money on your existing coverage.

#2. Calculate Before a Claim

Before you file a claim, take a quick moment to calculate and consider…

Can you afford a minor loss?

The number of insurance claims you file can impact the rate you pay. If you are considering filing a claim for a small incident, ask yourself if you can afford the loss.

If the answer is yes, you may save more money in the long run with lower contractor insurance premiums.

If your favorite hammer was stolen from the bed of your truck on the way to work, you can probably replace it without a claim.

If you were involved in an auto accident on your way to the jobsite, and you are facing vehicle damage, lost and damaged equipment and tools, and possible injuries to yourself, an employee, or a third-party…

Make the claim.

One way you can reduce your operating costs is by lowering the rates you pay on your contractor insurance.

Here’s how to pay less, without giving up coverage.

#3. Increase Your Deductibles

If you decide that paying out of pocket for small losses is an affordable option to prevent premiums from increasing, the next logical step is to increase the deductibles on your policies.

Take the biggest deductible amount you can afford.

Usually, a higher deductible means a lower premium rate.

The amount you save in annual premiums may be more than enough to cover your higher deductible when you finally do need to file a claim for a big-ticket loss.

#4. Don’t Let Coverage Lapse

Construction can sometimes be a seasonal profession, and it could be tempting to let certain coverages go in between projects, or during off-seasons.

If you want to save money, don’t do that.

Letting coverage lapse can actually lead to increased rates. It can also put you at risk for not getting coverage in the future.

Many insurance companies offer premium discounts for no-lapse coverage.

Determine the best policies that you need for your contractor business, and keep your policies active. Stopping and starting policies won’t save you money, and it can cost you even more in the long run.

#5. Combine Coverage

If increasing cash flow and protecting your profits is a priority, then there is a very good chance that you will use more than one contractor insurance policy to protect your business. And that gives you one golden opportunity to save some money with very little effort.

Combine your coverage.

Most insurance companies will offer a discount to you when you combine, or bundle, your coverage. Combine a general liability policy with an inland policy, for example, and you receive a discount on the premiums for both.

Talk to your broker about the ways you can bundle coverage on:

Saving money on your insurance rates gives you more cash flow for your business. And who doesn’t want to see more cash?

Remember…

Combine your policies together, review them regularly to make sure they fit your current business needs, increase your deductibles, don’t make claims for the small stuff, and be sure to maintain your coverage at all times.

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5 Ways to Advertise Your Construction Insurance Coverage

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There is a benefit to your construction insurance coverage you may not have considered. Your coverage makes you more attractive to future clients, and the homeowners and bid decision makers that you want to work with.

Insurance coverage alleviates your clients’ fears.

Project owners want to know that an accident on their property won’t cost them. They want to know that you will finish the job if something goes wrong. And they certainly don’t want to be asked to pay the price for it.

You are smart enough to carry builders risk insurance to protect your projects from accidents and worst-case scenarios.

So let future clients know about it!

Luckily, advertising to your future customers is easy and cost-effective in today’s world of digital marketing, and you won’t have to take out a billboard to do it.

Here are five ways to advertise your builders risk insurance coverage (without paying for a billboard):

1. Your Website

The way people shop for contractors has changed.

When a consumer goes searching for a contractor, you can bet they’ll be looking online. In fact, 89% of consumer purchases involve online searches.

Your customers will be looking for your website, and you won’t get a second chance to make a first impression. You have only moments to grab their attention with your website and convey that you are professional and trustworthy.

Make sure it’s optimized for search, loads quickly, and is responsive (mobile and tablet friendly).

And don’t forget to let your website visitors know about your builders risk insurance coverage.

2. Social Accounts

Are you using Facebook, LinkedIn, Twitter, or any other social accounts to advertise your business?

These are great places to put important information, including the fact that you are insured and bonded.

Make sure you have social icons prominently displayed on every page of your website where people can easily navigate to your social pages to follow you.

3. Email Newsletters

Do you follow up with your clients by emailing a weekly, monthly, or quarterly newsletter?

If you aren’t using email marketing, here are a few reasons you may want to start:

Emails are an easy way to reach your clients where they are (which is probably on their phones!)

Email newsletters are easy to create.

Email marketing is inexpensive.

Email newsletters are a perfect place to ask for referrals.

Emails are a perfect way to keep your clients informed. Show off your recent completed projects, give them some tips or tricks that they can use, and let them know of changes to your business.

For example, that you have updated your construction insurance coverage!

4. Electronic Business Cards

No matter how much technology is changing the way we do business, the business card will probably never go out of style. But today’s business cards are less about paper and print, and more electronic in nature. Electronic business cards, or vcards, are a modern way of getting your contact information out to new leads. Make sure your vcards advertise the fact that you are fully insured and bonded.

5. Online Directories

Gone are the days of the phonebook. Today, online directories are the best place to have your business found, and reviewed, by customers. Making sure your business page is accurately set-up on an online directory should be a part of your advertising plan.

Which directories should you be on? The most important one has to be Google+. Google is the king of all search engines, so you want to be involved in the social networks and directories that they offer. Google+ Local allows users to discover, review, and share businesses like yours.

Don’t forget Yelp, Yellowpages.com, and any other online directories that may be targeted towards your specific niche, like DirectoryForContractors.

Your digital marketing efforts will be even more effective when you are putting your best foot forward to potential new clients. Don’t forget to include information about your construction insurance coverage in all of your online marketing channels.

Construction Insurance

How Your Location Affects Your Course of Construction Rates

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Justin and Sam are both remodeling contractors. The two men have very similar business models: their companies are the same size, and they take on similar projects. What’s different for the two contractors, however, is the price they pay for contractor insurance.

Justin started his remodeling business in Texas, where he relocated to benefit from a favorable job and housing market. But Justin is also doing business smack dab in the middle of Tornado Alley, and he has seen firsthand the devastation and disaster a tornado can bring three out of the last four years.

Sam, on the other hand, is doing business in sunny Southern California. He works all year-round, and loves the weather — until late summer and early fall, when wildfire season starts.

Course of Construction Protects your Project from Disaster

Tornados. Fires. Floods. Earthquakes. Hurricanes. All across the United States, there is an extreme weather or natural disaster event that happens regularly in your hometown.

If one of these events, extreme weather or natural disaster, strikes a project while you are working on it, it could stall your progress, ruin your materials, and cost you out of pocket to recover, repair, and replace the damage.

That’s where a course of construction policy, which is also known as builders risk, protects your construction business.

When you need to clear debris, replace materials, repair damage, and get back on schedule, your course of construction policy keeps you from paying the full price for these geographical (and unfortunate) events.

Severe winter storms, hurricane season, Tornado Alley, earthquake zones. These events do more than just define your location; they also define the costs of your builders risk insurance policy.

Course of Construction: Different Rates in Different States

Your rates for a builders risk policy will vary from state to state, and even by county or city, since different regions or territories may be more at risk for a particular event than another.

For example, Sam has to contend with wildfires, but his particular county isn’t at risk for earthquake activity compared to other places in California.

There are numerous factors that come into play in determining your contractor insurance premiums, and the geographical location is one of them.

You may not be able to control the fires, floods, tornados, hurricanes, or earthquakes where you live, or the costs of doing business in that region. But many of your insurance premium costs are within your control, such as maintaining the right coverage, being on time with payments, and not making unnecessary claims.

Insurance costs are a part of doing business, but when you live in an area where a disaster is more likely to happen, the cost of not having coverage is even greater.

Construction Insurance