Preventing Builder’s Risk Claims
Builder’s risk insurance is a property policy purchased by building owners, developers, or general contractors to cover a loss of all or part of a building or building materials during construction. Fire and water are the most common causes of significant losses covered by a builder’s risk policy, and trespassers often are a contributing factor.
Current Issue
April 2024
Site Security
Site security is a growing issue in many regions, including Alaska. Advances in technology have led to the development of options beyond the traditional chain link fence and patrolling security guard arrangement. Continuously monitored camera systems installed around the perimeter and interior of a jobsite provide more thorough surveillance than staff on patrol. Many camera systems have the option to allow security firms to speak directly to the intruder, which often results in them leaving the site immediately. Increasingly, construction companies find this more effective than security guards that cannot monitor the entire site continuously.
Fire Prevention
A key policy for every construction site is a well-run hot work program managed by the general contractor with permits reissued daily. These permits, which include a separate risk assessment for each area, must be issued for activities that produce a flame, spark, or another significant heat source. Don’t forget activities that are out of sight, such as torch down roofing, finishing tasks like handrails, and cutting tasks like metal stud installation.
The risk of fire does not end when the hot work task is complete. The National Fire Protection Association (NFPA) reports that fires can start up to four hours following hot work. For this reason, a fire watch should continue after hot work ends for a period of time dependent on the type of task, heat load, and combustibles present.
When laying out a jobsite, think about fire safety as well. Store flammable gasses and liquids away from the building and high traffic areas, in a location protected from vehicle strikes.
Electrical safety is also important for fire prevention. Using appropriate cords for the electrical load, protecting electrical cords and junction boxes from damage, and implementing GFCI breakers all help prevent fires.
Water Damage
There are many potential sources of water on a jobsite; groundwater, rain, hoses, and pipes present risk from all directions. A leaking or burst hose during the night inside a building can cause extensive damage by the time it is found in the morning. Controls can include removing hoses at the end of the day, closing valves, and installing monitored water flow alarms.
Although the perils to a building under construction are many, integrating preventive measures during the planning stages and implementing them in the field greatly decreases the likelihood of filing a builder’s risk claim.
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