...course of construction, erection or fabrication.” When a policy follows this approach, one has to remember that although a building is a structure, not all structures are buildings (a building is generally considered to be a structure that will be occupied).
So if the construction project involves a structure, care should be exercised that it is identified and declared — and that the provisions of the policy follow through with the structure in mind. For example, if the builder’s risk policy limits collapse coverage to a building and a structure is being built, there could be a coverage gap.
Some builder’s risk policies take a broader approach to covered property by stating that coverage applies to property of every kind and description intended to become a permanent part of the construction, installation or erection of the project.
It is quite common for a builder’s risk policy to include coverage for scaffolding, temporary structures, construction forms and cribbing. Some insurers will include these automatically, others will subject them to a sublimit, and still others will require that their values be added to the policy limit. In the majority of cases, the contractor’s equipment — other than the aforementioned items — is not covered. Examples include bulldozers and ditch diggers. For such property, unless the insurer makes an exception, a contractor’s equipment floater is recommended.
Depending on the terms of the construction contract, the builder’s risk coverage may be purchased by either the contractor or the project owner. In either case, all parties to the project who may have an insurable interest in the construction should be named. As a general rule, however, suppliers of materials are not commonly named, nor are architects or engineers.
It is not necessary to list everyone by name on the policy. It might be easier to list the project owner’s name and then note that included as named insureds are contractors for all tiers. No name is necessary because insurance is only paid if the covered loss involves a party that has an insurable interest.