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A SMART PACKAGE: 3 SCENARIOS FOR PAIRING PREMISES LIABILITY WITH BUILDERS RISK INSURANCE
You may be asking yourself "When should I add premises liability to a builders risk policy?"
It’s a common question, and the answer often depends on the unique details of the construction project, property ownership, and the parties involved. At American Eagle Insurance, we recommend considering a combination of these coverages in certain scenarios to ensure maximum protection.
Premises liability insurance provides coverage for direct damages, including medical aid for injuries that occur on a property due to owner negligence. It also offers defense in case of lawsuits. When paired with builders risk insurance, this combination protects against construction-related risks like fire or vandalism, while also safeguarding against accidents such as slip-and-fall injuries on the property.
Here are three scenarios where pitching premises liability alongside builders risk insurance makes perfect sense:
NEW RESIDENTIAL CONSTRUCTION
Troy and Carla have sold their home and purchased a lot where they plan to build a single-family house. They reach out to an insurance expert at American Eagle for builders risk insurance to protect the construction phase, knowing their current homeowners policy won’t extend to the new location.
This scenario is a perfect opportunity to highlight the importance of premises liability coverage. While builders risk insurance protects against physical losses like fire or theft, it won’t cover legal or medical costs if someone is injured on the property. Premises liability helps reduce the financial impact of lawsuits or medical claims from visitors or trespassers who are hurt during construction.
By bundling these two policies, Troy and Carla can move forward with their project, knowing they’re fully protected.
COMMERCIAL RENOVATION
Kathleen is transitioning from her home catering business to opening her first bakery. She’s already secured a builders risk policy to cover the renovations but feels premises liability coverage is unnecessary, believing the likelihood of a lawsuit is low.
This is a common misconception. Construction sites can be hazardous, and accidents can happen even when precautions are taken. For example, if Kathleen invited friends to preview the progress, one of them could slip on a loose step and suffer an injury. Medical costs and potential lawsuits from such incidents could quickly escalate.
According to the National Floor Safety Institute, slip-and-fall accidents account for over one million emergency room visits annually. With premises liability insurance, Marie would have coverage for medical expenses and legal defense, reducing her financial risk.
RESIDENTIAL RENOVATION
Justin inherits a fixer-upper home and wants to add a new story. He applies for a loan to fund the remodel, but the bank requires proof of premises liability coverage before approving it.
This is a great opportunity to also introduce Justin to the benefits of builders risk insurance for his renovation. Builders risk protects the materials, fixtures, and construction site from risks like fire or theft, while premises liability addresses potential injuries on the property. Together, these policies offer Justin peace of mind and help him meet the bank’s requirements.
WHY PAIR BUILDERS RISK WITH PREMISES LIABILITY?
When construction is underway, your property faces two main risks: physical damage to the structure and liability for accidents. Builders risk insurance focuses on protecting the construction project itself, while premises liability covers legal and medical costs arising from injuries.
Bundling these policies through American Eagle Insurance ensures:
- Comprehensive coverage for the project and property.
- Financial protection from lawsuits or medical claims.
- Compliance with lender or legal requirements for liability insurance.
TRUST AMERICAN EAGLE INSURANCE TO PROTECT YOUR PROJECTS
At American Eagle Insurance, we’ve been helping property owners safeguard their investments since 1967. Whether you’re building a new home, remodeling a business space, or undertaking a renovation, we’re here to provide the coverage you need.
Don’t leave your project exposed to unnecessary risks. Contact us today to learn more about builders risk and premises liability insurance or to request a personalized quote.
Builders risk insurance is essential for any individual or entity with a financial interest in a construction or renovation project. This includes:
- Contractors: Protecting tools, equipment, and materials during the building process.
- Homeowners: Safeguarding their financial investment in custom builds, renovations, or home additions.
- Developers and Business Owners: Covering large-scale commercial projects and the assets involved.
- Financial Institutions: Ensuring loans tied to construction projects are secured against unforeseen risks.
Depending on the terms of the construction contract, builders risk insurance can be purchased by the owner, contractor, or both. Additional insured parties, such as subcontractors, may also be covered under the policy.
Builders risk policies offer broad protection against various risks. Common coverage includes:
- Property Damage: Safeguarding the structure under construction from fire, vandalism, theft, and other perils.
- Materials and Equipment: Covering items on-site, in transit, or stored temporarily.
- Soft Costs: Protecting against delays and associated costs, such as lost income, extra expenses, and interest on loans.
- Valuable Papers: Ensuring documents such as blueprints or permits are protected.
- Ordinance or Law Compliance: Covering the costs of adhering to updated building codes during reconstruction.
- Pollution Cleanup and Debris Removal: Ensuring quick recovery and cleanup after an incident.
- Scaffolding and Construction Forms: Providing coverage for equipment essential to the building process.
Optional endorsements, such as flood and earthquake coverage, are also available in certain locations.
At American Eagle Insurance Agency, we bring over 50 years of experience to every policy we write. Our builders risk insurance offers unparalleled benefits:
- Flexible Policy Options: Choose from single-project, blanket, or reporting-form policies to fit your needs.
- Comprehensive Protection: Coverage for a wide range of risks, ensuring your project is protected from start to finish.
- Expert Guidance: Our team works with you to assess your project’s risks and recommend the best coverage options.
- Quick and Easy Setup: We make it simple to get your policy in place, with fast approvals and responsive support.
- Adaptability: Our policies can be endorsed to account for changes in total project value during construction, ensuring no gaps in coverage.
