CBIA partners with Insurance Specialty Group to offer builders’ risk insurance program

Builders Risk Insurance Protection: The Modified Blanket Approach
Reduce Premium. Eliminate Reporting. Eliminate Failure-to-Report Concerns

Insurance Specialty Construction Group (“ISCG”) has designed a Builders’ Risk Program which addresses the current insurance needs of the residential and small commercial construction industry.

Builders’ risk insurance is typically offered in either a “new-starts reporting” format or a “standard blanket” coverage format. New-starts reporting formats require tedious monthly reporting. If reporting is done incorrectly, it may result in coverage gaps which leave a builder’s assets exposed. Additionally, both new-starts and standard blanket coverage formats require builders to pay premium based on “annual” rates, even if a home is built and sold in less than one year. This negatively impacts a builder’s profits.

ISCG is proud to offer our Modified Blanket Builders Risk Program which eliminates both of these concerns for residential and small commercial builders. This program provides significant premium savings, eliminates reporting for builders and eliminates potential errors and omissions for insurance agents.

ISCG’s Modified Blanket approach allows the builder to declare existing inventory and expected new starts (based on estimated completed values) at the inception of the policy. Insurance coverage is then provided on a blanket, non-reporting, basis. Rates are applied on a pro-rata basis, and the builder pays only for the period of time (in months) that each home is actually covered by the policy. There is no minimum premium related to expected new starts, and therefore no risk related to over-estimating construction starts.

Below is an example of the possible premium savings available to you:

Say a builder constructs and sells 15 homes, requiring 7 months to build and sell each home. The builder obtains quotes from two insurance companies who both charge an annual rate of $0.16 per $100 of values, and provide blanket protection for all 15 properties.

Their Way: Annual Rate of $0.160 per $100 in insured values
15 Homes X Average Insured Value of $250,000 = $3,750,000 in total insured value
Premium Due = ($3,750,000 / 100) X Annual Rate of $0.160 = $6,000

Our Way: Annual Rate of $0.160 per $100 of insured values
7-Month Pro Rata Rate of $0.093 in insured values (0.160 / 12 X 7)
15 Homes X Average Insured Value of $250,000 = $3,750,000 in total insured value
Premium Due = ($3,750,000 / 100) X Pro-Rata Rate of $0.093 = $3,488

Contact your insurance agent today to obtain a Modified Blanket Builders Risk Program quote from ISCG and see exactly how much premium savings goes into your pocket!

New-starts reporting & standard blanket programs are also available.

For more information, contact Stephen Harrell, VP/Underwriter for ISG, at 678 742 6336 or visit the Builders Risk section of the ISG website.