If you have plans to build a home or remodel your existing home you MUST continue reading.

A structure under construction needs a builder’s risk policy.  A contractor does not carry nor provide this coverage for you.  It's imperative that you purchase a builder’s risk policy for your own protection.  A builder’s risk policy consists of a standard homeowner’s insurance policy with two additional key components:  theft of building materials and collapse of the foundation.

Building materials are generally delivered by a vendor chosen by your contractor and remain at the building site.  Collapse of the foundation is crucial if a horrendous windstorm goes through the area and knocks down two of the three standing walls.  Your contractor will be happy to repair the damage and make the structure whole again, but not at his cost.  This is where your insurance will step in less any deductible carried.

Another critical point of interest when building or remodeling, is to be listed as an additional insured on the Commercial Insurance Policy of the contractor.  Two areas of concern where you MUST be listed as an additional insured is Premises Liability and Products/Completed Operations.  You do not want to end up acting as the bank in event there is a loss.  You want to make sure you are a party to the contractors coverage as an additional insured, where you would be covered by their policy as a result of their negligence.  Homeowners fail to do this 99.9% of the time.  A homeowner may get a certificate of insurance from the contractor and feel comfortable because the contractor has insurance, but this is absolutely not adequate.