Course Of Construction Insurance
September 26, 2023
Course of Construction (CoC) insurance, sometimes called builder’s risk insurance, is one of several essential types of insurance when constructing or renovating a property. CoC insurance protects property owners, contractors, and other stakeholders from a number of different risks.
Let’s analyze the types of coverage available through Course of Construction insurance, who it protects, and more—starting with exactly what it is.
What Is Course of Construction Insurance?
Course of Construction insurance covers buildings when they’re under construction or under renovation. This means it’s a type of property insurance. Typically, Course of Construction insurance has the following features:
- It’s “All Risks” insurance, meaning it covers for all perils except those specifically excluded by the policy.
- The insurance policy stays in place until construction is completed, after which a more traditional property insurance (like homeowners insurance) should take its place.
- The policies typically cover “hard costs” like the building itself and the materials used in its construction, and “soft costs” like professional fees.
Given the broad nature of CoC insurance, these policies can help cover all kinds of stakeholders, including:
- The property owner
- Financial investors
What Does Course of Construction Insurance Cover?
Course of Construction insurance typically covers two categories of costs: Hard costs and soft costs.
Hard costs include:
- The structure being built or renovated
- Construction materials
These are hard costs because they’re tangible. The replacement cost of any of these items is relatively easy to calculate.
Soft costs are those associated with professional services. They may include:
- Interest on loans
- Real estate taxes
- Professional fees and legal fees (from architects, engineers, lawyers, accountants, and other parties who may need to do additional work due to damage, vandalism, or other risks)
- Permit fees
- And more
Generally, soft costs are covered at a percentage of the total hard cost coverage. You can always purchase additional soft-cost coverage, along with many other additional coverages like CoC policy extensions.
You should also know that CoC policies—whether they’re called builder’s risk coverage or something else—do not cover contractors for general liability. Commercial general liability coverage, surety bonds, and other essential coverages for contractors must be purchased separately.
When Should You Purchase Course of Construction Insurance?
CoC coverage is essential for any construction project or renovation project. The project owner, the general contractor overseeing the construction project, or an investor in the project may purchase the insurance. These parties may even collaborate on paying the insurance premiums—after all, CoC insurance protects all of them.
Construction projects should never be undertaken without CoC insurance—even if the project is nothing more than a minor renovation.
CoC insurance gives you peace of mind—coverage to protect you from the devastating impact of fires, storms, and other hazards that might destroy your hard work and your property.
We offer Course of Construction insurance in Winnipeg. Visit our website and fill out an online application for a free quote, or give us a call. Looking for something in Winnipeg — like an insurance broker in Fort Richmond? We’ve got a location there—and a few others throughout the city.