Builders Risk Insurance: The Ultimate Guide & What You Need to Know in Ohio

At Bellwether Insurance, based in Ohio, we specialize in Builders Risk Insurance, a product designed to safeguard structures under construction or renovation. This policy can be purchased by either the property owner or the general contractor, and comprehensively covers every phase of the construction process, from the early planning stages to the final attainment of a Certificate of Occupancy.

In Ohio, the Department of Insurance regulates builders' risk policies, setting forth rigorous guidelines for coverage limits and requisite insurance amounts. These safeguards help shield contractors and property owners from financial setbacks resulting from unexpected events during the construction or renovation of a building.

Understanding Builders' Risk Insurance in Ohio

Builders' Risk Insurance in Ohio functions in a similar manner to policies in other states. Its primary purpose is to shield both the contractor and property owner from monetary losses due to unexpected incidents during construction or renovation.

This type of coverage usually provides protection against damages from fire, theft, vandalism, windstorm, hail, lightning, and explosions.

This temporary policy is designed to extend throughout the project duration. It's important to underline that builders' risk insurance does not cover damage resulting from subpar workmanship, defective materials, or carelessness on the part of the contractor or property owner.

Coverage Scope of Ohio Builders' Risk Insurance

Builders' risk insurance is meticulously tailored to protect against risks that transpire during the construction or renovation process. This policy shields physical damage to a structure stemming from:

• Windstorm
• Hail
• Lightning
• Explosions
• Theft
• Vandalism
• Fire or explosion
• Vehicle collision

In addition, builders' risk insurance can foot the bill for debris removal and the replacement of temporary structures, such as scaffolding.

It's crucial to note, however, that builders' risk insurance does not cover damage caused by poor workmanship, faulty materials, or negligence by the contractor or property owner. Also, this coverage does not offer liability protection for the contractor or property owners.

The Need for Builder's Risk Insurance in Ohio

If you have a financial interest in a construction project in Ohio, we highly recommend securing builders' risk insurance. This coverage can offer peace of mind and shield you from unexpected financial losses due to accidents or unpredictable events during the construction or renovation project.

Here is a list of individuals who might consider being included in your builders' risk insurance policy:

• Property owner
• General contractor
• Subcontractors
• Material suppliers
• Equipment lessors
• Lenders
• Architects

In addition to securing adequate coverage, it's crucial to comprehend your responsibilities as the property owner or general contractor. It's advised to thoroughly review all contracts and understand who is liable in case of damage or delays due to unforeseen incidents.

Calculating Builder’s Risk Insurance Cost in Ohio

The cost of your builders' risk insurance policy in Ohio can be influenced by several factors:

a) Project type: The nature of the project can greatly affect the cost. Whether you are constructing a new building, renovating, or remodeling will affect the policy's price.

b) Location: The cost of builders' risk insurance can differ based on the project's location. Areas with a higher risk of natural disasters, such as tornadoes or floods, typically cost more to insure.

c) Construction type and materials: More complex or expensive materials and construction methods will lead to higher insurance costs.

d) Expected completion date: Projects with a shorter expected completion date will typically be cheaper to insure because there's less time for potential damage to occur.

e) Amount of Coverage: The more coverage you purchase, the higher the cost, as there's more risk for the insurer.

f) Contractor’s Expertise: Contractors with a proven track record of successful projects may receive discounts on their insurance policies due to their lower risk profile.

g) Claims History: Your claim history significantly impacts the cost of builders' risk insurance. If you have a history of filing claims, your premiums will likely be higher than someone with a clean claim history.

h) Deductible: The deductible you choose for your policy also affects the cost of builders' risk insurance. A higher deductible generally results in a lower premium, as the insurance company will cover less of the cost in the event of a claim.

As a guideline, a builder's risk insurance policy typically costs between 1-5% of the total construction budget. For instance, if your construction budget is $200,000, a one-year builder's risk policy could range from $2,000 to $10,000 per year in premiums.

Does Builders Risk Insurance Cover Liability in Ohio?

Builder’s risk insurance in Ohio primarily covers property damage, focusing on the property under construction, as well as the materials and equipment associated with the project. This insurance does not offer protection for potential legal liabilities resulting from accidents or damage caused by the contractor or anyone else involved in the project. Therefore, it is essential to secure an additional liability insurance policy to provide protection in legal disputes or claims.

Liability insurance can help cover legal costs if someone suffers an injury or property damage due to your work. Additionally, it can provide coverage for certain types of malicious acts.

Questions to Ask Your Insurance Company Before Purchasing Builder's Risk in Ohio

Before purchasing builders' risk insurance in Ohio, it's crucial to ask your insurance provider some key questions to ensure you're getting the coverage that best suits your needs. These questions could include:

• Does the policy cover all construction materials, equipment, and labor?
• Does the policy cover losses due to theft or vandalism?
• Is there a deductible required for this type of insurance?
• Does the policy cover losses due to natural disasters?
• Does the policy cover liability claims?

At Bellwether Insurance, we're dedicated to providing the best options for builders' risk insurance in Ohio. If you have any questions or would like to discuss your project with one of our experienced representatives, please don't hesitate to reach out to us today.

We look forward to helping you secure the appropriate type of coverage for your project! Remember, understanding your insurance options is just as crucial as the construction project itself. With the right coverage, you can focus on the exciting aspects of your project, knowing that you're well-protected from any potential risks.