Difference Between Builders Risk And Wrap-Up Liability Insurance

Construction of a project involves several factors that are prone to risks and which, if not well managed, can significantly jeopardize a project – construction insurance assists in managing these risks so that your project can run smoothly. Construction work is risky from the conception to the completion stage; thus managing the risks appropriately is crucial to the success of the project!

Construction insurance comes in various forms, but two key policies stand out as important protection options: Builder’s Risk and Wrap-Up Liability. Learning the Difference Between Builders Risk And Wrap-Up Liability Insurance will make your project sufficiently protected.

Builder’s Risk Insurance Can Help You To Insure the Construction Project Assets

Builder’s insurance is also known as Course of Construction Insurance, and it acts as a protective cover for tangible properties that are associated with the construction project. Policies typically offer coverage against several perils associated with construction such as:

• Property Damage: Construction sites are always under threat of fire outbreaks, theft, vandalism, and natural disasters. This policy offers cashback in instances that such incidences occur and repairs or replacements have to be made as required.
• Materials and Equipment: These policies protect materials and contractor tools at the construction sites and also the loss of income resulting from interruption by the perils that affect the construction pace.
• Loss of Income: This coverage usually lies with the owner, developer, or general contractor associated with a venture. It should be noted that Builder’s Risk only covers physical loss/ damage – it does not cover liability claims.

To get more information about Builder’s Risk coverage and its possible extensions, read our blog post: “What are Builder’s Risk Policy Extensions?”

Wrap-Up Liability Insurance Offers Constructors Comprehensive Protection

Wrap-Up Liability Insurance takes an unconventional approach. Instead of covering only property, it provides one comprehensive liability policy covering all parties involved in construction projects such as the owner, general contractor, subcontractors, and architects and engineers - even before their involvement begins! Here's how Wrap-Up works:

• Each party involved receives one policy instead of needing their liability policy.
• These policies are typically purchased by owners or general contractors.
• It offers many advantages to all parties involved with a project, including simplified claims processing, uniform coverage across the board, and potentially reduced overall insurance costs for their project.

Key Difference Between Builders Risk And Wrap-Up Liability Insurance

Once we understand the difference between Builder's Risk And Wrap-Up Liability Insurance policies, it's time to understand when they should be utilized! For comprehensive protection, both Builder's Risk and Wrap-Up are often combined. Builder's Risk remains essential during construction projects themselves while Wrap-Up becomes especially useful on larger-scale jobs with multiple contractors by eliminating coverage gaps and streamlining claims processes.

Read more: Builder’s Risk vs Property Insurance

Final Thoughts

Acknowledging the differences between Builder's Risk and Wrap-Up Liability Insurance is essential in making informed decisions for protecting your construction project. Remember, each project's requirements will dictate which insurance options would best meet them! 

Summit Insurance's experienced professionals are on hand for expert guidance and customized quotes if any issues arise about construction insurance - let them assist in finding what will provide complete protection from its inception!

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