An Inside Look at Builder’s Risk for Large Projects

Large Projects Make Builder's Risk Insurance Complex

"We're seeing many projects with total values in excess of $25 million in the wholesale space," says Will Buckley, RPS broker/account manager. "Placements for these larger wood-frame projects are complex, even in non-catastrophic areas."

How come? Security issues for one. Large wood-frame construction projects have many site security requirements, including the need for third-party monitored surveillance, water flow detection, guard patrols and fencing height requirements. Risk managers and contractors should consider site security as part of their construction costs when bidding on a project.

Renovations, Building Conversions and Structural Integrity

"We're see a lot of renovation projects in the wholesale space," says Buckley. And that brings risk.

Any changes to the structure of the existing building add to the placement's complexity. Underwriters want to know the construction of the existing building and its current condition, as well as details about the planned structural changes, the renovation schedule and the contractors involved. An engineer's assessment of the existing building is usually required if major structural changes are included in the project scope.

"For these renovation projects, underwriters will need to understand how the proposed renovations would impact the existing structure," explains Buckley.

Also, for building conversions, the existing building often must be gutted, with all new systems and interiors constructed. The existing exterior envelope is a key component of the project, and coverage for damage to that envelope is very important.

Non-Frame Construction Is Easier for Builder's Risk Placement

Buckley explains that fire-resistant, masonry and non-combustible construction projects can be easier to place than their frame counterparts, barring a wildfire, flood, earthquake or coastal exposure.

Regarding supply chain delays, some projects that experienced material delays and shortages during and after the pandemic are nearing their end dates.

"We're still seeing most projects requiring policy extensions," says Buckley.

Large Projects Require a Great Deal of Information Gathering

When working on insuring large construction projects, agents and brokers should understand that these projects require a lot of information and documentation for underwriting.

"Builder's Risk coverage involves many questions and a great deal of back and forth with underwriters, the agent and insured," says Buckley. "There can be different information required for a new construction build in comparison to a renovation."