Does Builders Risk Insurance Cover Subcontractors and Suppliers?

Construction projects often have a variety of interested parties, including not only the owner and the contractor but also subcontractors and suppliers. Protecting everyone involved in various projects is essential and requires careful consideration. 

One measure every company should consider is builders risk insurance. It plays a vital role in safeguarding the interests of key players in the construction and renovation business. Understanding policies and their coverage will help you determine how best to protect your business.

Builders Risk Insurance Overview

This coverage is designed to address the cost of physical damage to a construction project while it’s still in progress. In most cases, the policy focuses on protecting the financial interests of the owner, contractor, and lender, as they have the most significant stake in the project.

The policy’s scope extends beyond what some construction professionals realize. Coverage typically includes not only the structure itself but also on-site materials and equipment, creating a financial safety net to protect those with a vested interest in the event of a fire, theft, vandalism, or a natural disaster.

What About Subcontractors and Suppliers?

One common business insurance misconception is that a builders risk policy automatically covers subcontractors and suppliers. Unfortunately, many policies fail to extend that coverage. In most cases, subcontractors and suppliers need their own policies to protect their materials, tools, and equipment.

However, some comprehensive policies extend coverage to actions by subcontractors and suppliers. Confirm with your agent to be sure you understand your coverage and risk exposure for the actions of these parties.

Ask your agent about adding your subcontractors and suppliers to your liability coverage as additional insureds, providing a layer of protection on your policy in the event of any liability for damages or losses during construction. 

Other Protections to Consider

Although builders risk is an essential policy for construction businesses, it does not cover every potential exposure. You should also consider investing in general liability coverage, which protects against bodily injury and property damage claims resulting from construction activities. Workers’ compensation insurance covers any medical costs and lost wages for your employees after an on-the-job injury.

Professional liability insurance offers essential liability protection for architects, engineers, and design professionals on your project in case of any errors or omissions in their services. Finally, contractors’ pollution liability can help your company address potential pollution or environmental damage, including cleanup costs and liability settlements.

Get Your Construction Business the Protection It Needs

The construction industry comes with extensive risks, and unforeseen circumstances can lead to devastating financial losses for construction businesses. 

Builders risk coverage is essential for protecting your business against these losses and ensuring its consistent operation. The more you understand your company’s risk exposure and the policies that can help mitigate it, the easier it is to protect your investment.


About Provident Protection Plus

For more than 65 years, Provident Protection Plus has served businesses and residents across several states nationwide. Today, we are a wholly owned subsidiary of Provident Bank, the region’s premier banking institution. To learn more about our coverage options, contact our specialists today at (888) 990-0526.