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Builders risk insurance protects homebuilders from the hardship experienced if fire, vandalism, or a storm damages a construction project. While you can’t stop disasters from happening, having a comprehensive builders risk policy can provide financial coverage in the case of an unexpected event.
Whether you’re new to homebuilding or an industry veteran, it can be hard to know if your builders risk policy is cost-effectively providing protection. To help you understand how other builders like you have structured their builders risk policy, we’ve compiled 3 builders risk examples from Ontario homebuilders.
While the cost of a builders risk policy can vary significantly based on the values of the project, location, or duration, let these 3 builders risk examples act as a general benchmark as you evaluate your policy.
Builders Risk Example 1: Single Family Home Blanket
In Ontario, there are approximately 6,500 homebuilders, and in this first example, we explore how one Ontario homebuilder structured their builders risk policy when building single-family homes in their region.
In example one, this construction company builds five homes a year, with an average building cost of $500,000 each, totaling $2,500,000 annually. The average build time for each home is approximately four months.
In working with the Buildsure team, we recommended a blanket policy, which is an insurance policy that covers properties under construction in multiple locations. Through our exclusive builders risk frame rate program, we secured them a rate of .035/month. This resulted in the client paying $3,500 in premium or $700 for each home.
While the results can vary depending on several factors, for this client, we were able to provide significant cost savings over their previous construction insurance program, which was not customized to their needs.
While it may seem all insurance brokers are the same on the surface, working with an experienced construction insurance broker can make all the difference, as it did in this first example.
Builders Risk Example 2: Townhouse Condominium
With the rising cost of single-family homes, many homebuilders are turning their production towards townhouse condominiums. In this second example, we look at a Buildsure client’s builders risk insurance policy for the construction of townhouse condominiums.
Buildsure client number two is a construction company building three townhouse blocks, each with five units. The total build cost is $350,000 per unit or $5,250,000 for all three project blocks. The estimated time for the project will be 12 months.
Partnering with Buildsure, they were able to secure the builders risk frame rate of .035/month. The builders risk policy was issued at a total cost of $22,050.
Not only were they able to secure a favorable rate for their builders risk insurance, but they continued to partner with their broker at Buildsure following the completion of the townhouse condominiums. The condo corporation took over, engaging with Buildsure to ensure they had the right coverage to protect the townhouse condominium going forward.
Canada saw a surge in apartment construction in 2023, according to CMHC. They uncovered that apartment construction increased by 7%, reaching a historic high of 98,774 units in 2023.
With more and more apartments under construction in Ontario, many builders are evaluating their builders risk insurance. If that sounds like you, this last example explores a builders risk policy on a midrise apartment building.
In this third builders risk example, a Buildsure client built a 4-storey midrise apartment building. The total cost of the apartment construction project was $5,000,000, and the duration of construction was estimated to be five months.
This construction company reached out to the team at Buildsure to see if they could provide the coverage they needed at a favourable rate for their apartment building construction project. Their buildsure broker secured a .035/monthly rate, making their total premium $14,000.
While all three examples are different projects with different builders, the one common thread throughout them all is selecting the right broker, which can be a competitive advantage in a construction project. From knowledgeable advice to solid relationships with construction insurers to customized homebuilders programs with favourable builders risk frame rates, the Buildsure team is the go-to for homebuilders.
We’re here to help if you’d like us to look at your current builders risk policy, are looking for a quote for an upcoming project, or have another commercial insurance need. Complete the form online or call us to contact a Buildsure broker today.
