Builder’s risk

Builder’s risk

Wood structure vs. non-combustible material and additional steps

by Jason Tallent

We have recently been covering the rising cost of property insurance. Focusing more on the construction aspect, especially when it comes to building / rebuilding using a wood structure versus a non-combustible material.

If you are a general contractor, chances are you are building more structures out of wood frames today than any other time in the past. We are seeing an influx of large scale projects where architects and engineers are specifying wood-framed construction. As you might guess, the susceptibility for fire loss increases considerably when dealing with a wood structure versus a non-combustible material. Many insurance carriers are limiting the amount of exposure they are willing to cover for wood frame projects. Also, the cost of securing a builder’s risk policy for a wood frame structure has increased substantially. You may find it difficult to receive coverage for individual projects in excess of $5,000,000. It is very common, in today’s marketplace, for agents to work with multiple carriers in order to layer coverage so that they can satisfy a project’s limits.

Nowadays it is also very common to additionally require 24/7 security, video surveillance, and perimeter fencing in order to limit exposure of arson, vandalism, and theft. Another thing to keep in mind is that East Tennessee has multiple protection classes (based on proximity to fire departments, fire hydrants, response times, etc) that can make it difficult to get the builder’s risk coverage you need for a new build.

There are a lot more complexities now regarding construction. If you are struggling securing builder’s risk coverage for your project, or would like to speak with someone with expertise, we are here to help you.