Building Success in the Bay State: The Power of Builder’s Risk Insurance in Massachusetts

In the bustling heart of Massachusetts’ construction landscape, Builder’s Risk insurance emerges as the silent guardian of every project, ensuring that risks are managed, and investments are secure. As the Bay State continues to witness a dynamic construction industry, with projects ranging from building restorations in Boston to innovative developments in Cambridge, understanding the nuances of Builder’s Risk insurance becomes of the utmost importance for stakeholders.

In this complete guide to Builder’s Risk insurance in Massachusetts, we will walk you through everything you need to know to safeguard your construction project. From understanding the basics to identifying the key coverage elements, we’ve got you covered.

Don’t let unforeseen events and risks jeopardize your construction project. Get informed, get protected, and achieve peace of mind with Builder’s Risk insurance in Massachusetts.

Understanding Builder’s Risk Insurance

Builder’s Risk insurance is a specialized form of property insurance that provides coverage for construction projects. It is designed to protect the building itself, as well as the materials, equipment, and fixtures used during the construction process. This insurance coverage is essential because it safeguards against a wide range of risks that can occur during construction, such as fire, vandalism, theft, and natural disasters.

Builder’s Risk insurance policies have a specific coverage period, which starts when construction begins and ends when the project is completed or handed over to the owner. The policy covers any physical loss or damage to the insured property during this period. It is important to note that Builder’s Risk insurance does not cover liability claims or worker injuries. Separate insurance policies, such as general liability insurance and workers’ compensation insurance, should be obtained to cover these risks.

Builder’s Risk insurance can be purchased by different parties involved in the construction project, including the property owner, general contractor, or subcontractors. The policy can be customized to meet the project’s specific needs, considering factors such as the project’s value, location, duration, and type of construction.

We Insure Commercial and Habitational Risks

Distinguished writes Builder’s Risk insurance for both the commercial and habitational markets. We offer coverage for ground-up new construction, remodelers, and betterments-only projects. Policy terms of three, six, nine, and 12 months are available, with the option to extend the policy term for qualifying risks.

We write the following construction types for new construction and remodels:

  • Frame up to $7.5M
  • All other construction up to $20M

For Coastal Builder’s Risk:

  • New Construction – TIV up to $20M (Frame brand new construction up to $6.5M TIV)
  • Remodeler’s Risks – TIV up to $5M
  • Betterments Only – TIV up to $5M

Liability Insurance Available

Distinguished is in a unique position in that we offer Liability insurance as part of our Builder’s Risk program. Liability coverage is available for named insureds who are the owner, trust, or lender – not the general contractor or developer. Liability limits start at $100,000, and we can write up to $1 million/$2 million in coverage.

We Will Consider Providing Coverage for Prior-Starts Projects

We will look at prior starts that require coverage. The project must be in its initial stage and will be reviewed on a case-by-case basis depending on the completed work; for example, if only after the foundation is in. A client on an all-cash project may not have purchased insurance and is now seeking coverage. Or perhaps the client believed their Homeowners policy would provide coverage for the new build or remodel and was later informed this was not the case. We will consider providing a Builder’s Risk policy if the project meets our time frame and other requirements.

Provide Coverage on the Front and Back End of Construction on Remodels

With Distinguished, Vacant Building coverage is built into our program for Remodelers Builder’s Risk insurance. If a project is delayed after the policy’s effective date, the vacant building will be covered for up to 45 days. Conversely, upon completion of the remodel, if the property remains vacant prior to sale or occupancy, there is Vacant Building coverage.

Factors That Can Affect the Cost of Builder’s Risk Insurance

The insurance cost, also known as the Total Insured Value, primarily hinges on the total expenses of the project, which are determined by either the actual cash value (ACV) or the replacement cost (RC).

The Replacement Cost (RC) signifies the complete expenditure required to replace all items or property entirely, usually based on current market prices. On the other hand, the Actual Cash Value (ACV) is the RC deducted by any depreciation of property damaged or stolen at the time of loss. ACV reflects the actual value at which the property could be sold, considering its current condition and age, generally lower than the replacement cost.

Moreover, insurance companies consider the following factors when formulating a Builders Risk (BR) insurance quote:

  1. Project location: Areas with higher crime rates, proximity to the ocean, or increased susceptibility to natural disasters may lead to higher insurance costs.
  2. Construction materials: The choice of materials used in construction, especially rare or easily damaged materials like wood, can impact insurance premiums.
  3. Supplemental coverages: Additional coverages beyond the basic insurance package contribute to premium costs.

Why Partner with Us for Builder’s Risk in Massachusetts

When it comes to Massachusetts Builder’s Risk Insurance, choosing Distinguished is a decision rooted in expertise, reliability, and unwavering commitment. With a deep understanding of the unique challenges and opportunities within the state’s construction industry, our team provides tailored solutions that go beyond standard coverage to meet your client’s needs. We are the trusted partner that shares your vision for success, delivering maximum protection.

It’s important to note that we do not write coastal property in Massachusetts. In addition, our program is not available for properties on the National Register of Historic Places. However, if it’s not a listed historic building, we can write the property.

Submit Builder’s Risk Business Online

You can submit your business through our online submission portal. Simply register your brokerage, go to our Broker Portal, and spend a couple of minutes adding in the insured’s details, and we’ll get back to you with a quote. If your clients like what they see, you can bind the policy right there through the same online portal.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

View a full list of our programs and submit business with Distinguished.

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