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August 19, 2022

Everything You Need To Know About Course of Construction Insurance

As a general contractor, developer, or property owner, have you ever worried that construction will be disrupted by inclement weather, fire, or criminal activity? Have you ever worried about the losses from such damages—not to mention the costs associated with the delays? These are all perfectly valid concerns. 

As a general contractor, developer, or property owner, you have the most to lose if an ongoing construction project is met with unforeseen damages or obstacles. Fortunately, there are solutions available to help protect you against such catastrophes and minimize their impact on your bottom line. One of these solutions is called course of construction insurance or builder’s risk insurance.

In this article, you’ll discover exactly what course of construction insurance is, the benefits of purchasing course of construction insurance for your next project, and more. 

Let’s get started!

What Is Course of Construction Insurance? 

Course of construction insurance (COC), also known as builder’s risk insurance, is a type of property insurance that protects the policyholder (the person who purchased the policy) from losses that occur during construction or other improvements/repairs to real property. This type of insurance typically covers losses caused by events such as fire, vandalism, theft, storm damage, and water damage.

The coverage provided by course of construction insurance typically lasts for the duration of construction and offers protection against many of the risks associated with the work in this field. It can also help protect against liability claims related to the work being done.

Multiple cranes that are covered by builder’s risk insurance at a construction site

What Does This Type of Policy Cover? 

A course of construction policy is a major part of any construction project. It ensures that you are protected from liabilities for damage that may occur during construction. The policy typically covers:

  1. Liability arising from work performed on the site, including all materials and equipment used in the process (e.g. scaffolding and cranes).
  2. Liability for loss or damage to property belonging to others (e.g. adjacent buildings). This includes damage caused by subcontractors or workers hired by the builder.
  3. Losses caused by an insured party’s failure to complete their part of a contract within a reasonable period as agreed upon in writing by both parties at the time they entered into the said agreement.

Who Needs Course of Construction Insurance? 

Course of construction insurance is a type of insurance that protects the insured against construction-related losses. The insured is typically the party that is responsible for designing and building a structure, as well as the entity that hired them to do so.

The following parties may be eligible for course of construction insurance:

  • The architect or engineer who designed the structure;
  • The owner (or developer) who owns or leases the land where the structure will be built; and
  • A contractor who is responsible for constructing or renovating a structure.

How Much Does COC Insurance Cost? 

Course of construction insurance is more affordable than most people think. Although it does vary, the cost of course of construction insurance is typically less than 1% to 5% of the total cost of the project. Several factors can affect how much a course of construction policy costs, including:

  • Location (where the construction will take place);
  • Size (how many square feet are being covered); and
  • Type (what kind of building will be built).

The Benefits of Course of Construction Insurance

Course of construction insurance coverage protects against costly losses that may occur during construction. It’s an important part of any project—and it’s not just advantageous for the contractor.

With its various benefits, builder’s risk insurance protects against the following:  

  • Claims for delays in completion;
  • Losses or damage to the property under construction and the materials/equipment used; and
  • Liability claims.

 A contractor and a client shaking hands at a construction site

Get Builders Risk Insurance That You & Your Clients Can Rely On 

Based in Ontario, Contractors Insurance is an award-winning insurance brokerage firm that specializes in custom insurance plans tailored your specific needs. Our insurance experts can set up builder’s risk insurance or course of construction insurance that you can fully rely on. 

Count on our team to provide next-level assistance for all your insurance needs—from negotiating premiums to following up on claims.  

Take the next step towards peace of mind and boost client trust with a customized course of construction insurance policy. Contact our team today!


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