So, you’ve hired an architect, and a general contractor. Maybe you’ve even finished up the design plan with your architect and designer. Before you start cutting checks it’s time to start thinking about insurance. Insurance is a critical piece of the new construction puzzle.
Don’t be like John. (John is a fictitious name assigned to a real client) John had all the best intentions in the world. He secured funding for his new building, hired an architect, hired a general contractor, even had a groundbreaking ceremony.
What happened next… John’s general contractor went to work building his new building. After a few months the bank started asking John for insurance. John naturally turns to the general contractor and asks for a certificate of insurance for the bank. The general contractor is happy to oblige. John promptly gets the proof of coverage to the bank and thinks all is well.
However, the bank asks John for more insurance. Specifically, the bank is looking for builders risk insurance. *This is the best policy type for any sort of major renovation or new construction* John then goes back to the general contractor and starts asking for builder’s risk insurance.
The general contractor at this point makes it clear he does not have builders risk or ANY property coverage for the new building. He states the owner is supposed to have this coverage. A lot of back and forth and he said she said nonsense. But in the end, it was in-fact John’s mistake in not securing the builders risk coverage.
In the end, the building was about 50% completed when the builders risk coverage was finally taken out. With no accidents or fires it was a closely avoided disaster, but could have resulted in a huge loss for John.
Now before you get all judgmental on John for making this mistake… The infamous insurance capital of the word the City of Hartford recently made a very similar mistake with one of their new buildings. The Yard Goats Stadium. 
If the city of Hartford can make this mistake, and John… you probably can too. It is extremely important to have an insurance plan from the start of any construction project.
Whether you are talking about a small renovation, or a large scale new building, insurance needs to be a topic of discussion.
Want to start that discussion?
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