Builders risk policies leave common gaps ahead of storm season

Project owners heading into peak storm months are being warned to check builders risk coverage for flood, earthquake, occupancy-triggered termination and transit gaps. The issue matters most from mid-August through October, when storm exposure is highest and unfinished projects face the most risk.

Why it matters: - Construction projects face the highest weather risk from mid-August through October, right as many builders are trying to finish work before winter. - A missed exclusion can leave an open structure exposed to flood, earthquake or an early policy termination tied to occupancy. - A coverage gap during storm season can turn a single event into an uninsured loss.

What happened: - BuildersRisk.net said project owners often check policy limits but overlook exclusions, expiration triggers and transit coverage. - The brokerage pointed to two common gaps in course of construction policies: flood and earthquake are usually excluded by default, and coverage can end when a building is occupied. - The Atlantic hurricane season runs from June 1 through November 30, with the most active period from mid-August into October.

The details: - Standard builders risk policies typically cover fire, wind, theft and vandalism. - Flood coverage is added separately, not included automatically. - Optional flood protection typically increases premium by 5% to 10%. - Owners in exposed markets should check how their windstorm deductible is calculated, since policy structures can vary. - Pricing is based on published rates per $100 of project value. - New residential construction runs about 30 cents per $100 of value, putting a $500,000 project near $1,500 for a year. - Renovation and rehab work runs about 65 cents per $100, putting a $300,000 remodel near $1,950. - A basic policy starts at roughly $700 for 12 months on projects valued up to $200,000. - Coastal and disaster-prone projects can price 10% to 20% higher. - Wood-frame construction can add 10% to 15% over more fire-resistant materials. - Policies are written in three-, six-, nine- or 12-month terms. - Premium is fully earned at inception, so early completion does not produce a refund. - Coverage ends at expiration, occupancy or owner acceptance, whichever comes first. - A tenant moving in early can end coverage before the date printed on the policy. - Extensions are routine before expiration and harder to secure after a lapse. - A lapsed policy leaves the structure uninsured until new coverage is bound.

Between the lines: - The biggest mistake in builders risk shopping is often assuming the policy is broader than it is. - Storm season makes timing mistakes more expensive because a delay in binding replacement coverage can coincide with peak exposure. - A term that matches the real project schedule is usually more efficient than paying for extra months that may never be used. - BuildersRisk.net said it has more than 26 years of experience and access to more than 15 A-rated carriers in all 50 states, which positions the brokerage around quick placement rather than broad claims handling.

What's next: - Project owners heading into late summer and fall should confirm exclusions, deductible structure, occupancy triggers, transit coverage and extension rules before the first major storm arrives. - BuildersRisk.net said online quotes are available at buildersrisk.net. - The brokerage said confirmed quotes from A+ carriers are issued within an hour of a completed request, with same-day coverage in most cases. - BuildersRisk.net places builders risk and course of construction coverage for contractors, property owners, developers, house flippers, architects and school districts. - Policies are available for commercial, residential and remodeling projects.

The bottom line: - Builders risk coverage can look complete on paper while still leaving a project exposed at the exact moment storm season peaks.