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Builders Risk Insurance: Water Damage or Flood?

When it comes to builders risk insurance, where the water comes from and how the damage occurs can make all the difference in respect to policy coverage. When water rises as a result of torrential rain, storm surge, melting snow or any other weather-related event, it leaves destruction in its wake. But that isn’t the only way that water can be highly destructive. A slow leak can be just as damaging to construction projects as a sudden flood.

"Builders Risk: Water Damage or Flood?" examines how builders risk insurance policies often distinguish between water damage, flood or storm surge, and how the policy wording can impact coverage. It also outlines steps builders and contractors can take to proactively address this risk and, ultimately, to help avoid severe consequences.

In the United States, heavy downpours have been increasing over the last three to five decades, particularly in the Midwest and Northeast, and that trend is likely to continue.

2014 National Climate Assessment, U.S. Global Change Research Program

Key highlights of the paper include:

  • The importance of recognizing the many potential sources of water damage and understanding that, regardless of how well a project is managed, damage can still occur
  • Understanding why it is critical to know what is covered by a specific policy when obtaining coverage, not after a loss
  • How proactively identifying risks on a construction site may help mitigate future losses
  • What a comprehensive prevention plan might look like, including steps for pre-task planning, proper work sequencing and robust response measures if leaking water is found

Addressing Risks, Understanding Coverage & Mitigating Exposures

The smallest of leaks can lead to large claims. Protect your construction project.