Homebuilder Business Insurance
Our Home Builder Protection Package includes:
- Builder’s Risk
- Risk Management package including:
Easy-to-use, step-by-step Risk Management package
Contractual transfer with subcontractors
Establish independence with subcontractors
Sample contracts and sample certificates of insurance for subcontractors - Competitive general liability policies
- Employee accident insurance
Homebuilder FAQs
Q. When should I report a home on the builder’s risk policy? I typically wait until the slab is poured.
A. Coverage usually begins on a policy when materials are delivered to the job site to begin construction. To ensure proper coverage, a builder should report the house during the month materials were first delivered to the job site. Failure to report could result in no coverage for stolen materials or damage caused before you reported the home.
Q. I heard that I should not report land cost, but just the loan amount on a house. What is the correct amount to report on the policy?
A. Reporting only the loan amount is extremely dangerous for many reasons. The policy is written to insure up to the completed value of the home, including amounts for reasonable profit, soft costs, such as permit fees, and engineering costs as well as all of the hard costs in completing the home. The loan amount may not be sufficient to make a builder whole after losing a home to fire. The bank is concerned only with protecting their loan. The loan amount should not be a determining factor in calculating the insured value of the home. Our recommendation is to report the estimated sales price (not list price) minus the land cost. This guarantees that your hard costs, soft costs and profit are insured. One of the requirements for all builder’s risk policies is that the builder insure the home to completed value. If a home is insured for less than completed value, penalties are applied to claims. Insuring only the loan amount could cost you substantially if there’s a fire as well as put you in violation of the conditions of the policy to insure to completed value of the home.
Q. What is the correct builder’s risk plan for me?
A. There are four types of builder’s risk plans that we offer at Box Insurance. The right plan depends on three primary factors: 1) the average time taken to complete and sell the home, 2) the number of homes built per year, and 3) estimated gross annual revenues. Please call us at 817.481.3529 so one of our builder-trained agents can help you determine the best plan for you.
Q. Many of my associates and even my attorney told me it is a bad idea to carry general liability because it does not cover construction defects. Is this true, and what is your opinion?
A. For years, the insurance industry offered only one or two policies for general liability. The primary policy excluded construction defect. We offer two separate policies that both provide construction defect coverage as well as defend you if you are held liable for a subcontractor injury. General liability is a critical component of your overall risk management program, however, it is secondary to having insured subcontractors. In most cases, subcontractors provide the first line of defense. General liability is extremely expensive if your subcontractors are uninsured. Also, general liability is not a substitute for having a poor risk management program. It should be part of your Risk Management program, not a substitute.
Q. When you mention a Risk Management program, what do you mean and how do I implement it?
A. As a home builder, you face unique exposures by taking on responsibility, and therefore liability, for work that you did not perform. The primary focus of a Risk Management program is how you contract and work with your subcontractors. Box Insurance has designed a best practice Risk Management program that is easy to use and reasonable in subcontractor requirements. We offer this program for free to builders who purchase builders risk and general liability from Box Insurance. We provide all the necessary tools, such as a sample contract, a sample certificate of insurance required by subcontractors, an insurance tracking system and the letter required to let your subcontractors know about the change.
