Is your client planning a build or remodel? If so, it’s crucial to consider the potential impact on their risk profile. Building and remodeling come with their fair share of liabilities, and it’s easy for these to catch people off guard. Keep reading to find out how you can help your client stay protected.
If your client owns the land or building/unit, your client has liability. Excitement levels tend to peak when clients embark on a new project. They’ve patiently waited to secure a spot on the general contractor’s schedule, and finally, it’s their turn. The contractor hands over a contract, your client signs it and things kick off. The problem? The details. Contractors often include clauses that shift liability onto your client as the property owner.
What can you do? Make sure your client is adequately indemnified for any risks associated with their project. Have both an attorney and your insurance partner review the contract to identify any potential liabilities. Confirm that your client has proof of insurance coverage for liability, workers’ compensation and other necessary lines of coverage not only from general contractors, but also sub-contractors and others working on the property.
Your client needs to ensure they are insured for the project. While this seems obvious, you’d be amazed how often people are surprised they aren’t covered for events that occur on their property during construction. Underwriters require disclosure of construction projects and renovations and may endorse or cancel a policy until construction is completed.
What can you do? Consider a separate builder’s risk policy to cover the unique exposures related to the property. Also, talk to your insurance partner as liability coverage should also be reviewed as the homeowners’ policy may not afford liability to the construction project.
Get proactive with your client. While new builds and renovations are exciting projects for your client, they can quickly become headaches without the right coverage. Here are some key talking points to help you and your client get the right coverage, so they can keep their focus on their project:
- Scope of work – What is the plan for the renovation/remodel, or home build? Will the project involve shoring, hot works, or combustible materials? Does the client plan to sell the residence? Is the value of this project over $5M? If so, a performance bond should be discussed / considered.
- Project estimates – Duration of project and what is the total budget?
- Living arrangements – Is the client moving out of the residence?
- Project Management – Is the client hiring a general contractor (GC) where such GC will contract sub-contractors directly, or will the client act as general contractor and be hiring sub-contractors directly?
The best way to ensure your client is properly protected for their new project is to talk to an experienced insurance advisor. AssetSure has a strong track record of assisting financial advisors, family offices, businesses and private individuals with builder’s risk planning and insurance. AssetSure can review insurance requirements with you and your client to ensure ample coverage and indemnification. If your client is acting as their own general contractor, AssetSure can propose coverage for client-owned construction materials and liability and update policy values once installed as part of the building. As your ally, AssetSure is committed to making sure your client’s new construction or renovation project stays a dream and doesn’t turn into a nightmare.