Navigating Builders Risk Subjectivities

HOW TO AVOID UNNECESSARY DENIALS OF A BUILDERS RISK CLAIM

Key Takeaways:

• There is an increased frequency of denial of coverage for builders risk claims based on failed subjectivities and the more onerous nature of the subjectivities.
• To avoid this issue, those in the construction industry should: (1) confirm that all policy subjectivities can be complied with; (2) confirm each subjectivity is clear and readily understood; (3) develop procedures to confirm compliance with each subjectivity and monitor that compliance throughout the project; and (4) build in a contingency plan for things that go wrong.

Builders risk policies are a key component to a construction professional's risk management program. These policies protect owners and construction professionals from losses arising from unexpected events such as fire or storms which cause substantial damage to a project during construction. In doing so, builders risk policies help protect a construction