Time is money, especially in the construction industry, as a delayed start to a building project could create a domino effect that changes the entire project schedule.
As unexpected and unavoidable delays can become expensive losses, builders risk insurance that covers delays in start-up can soften a financial hit.
Unfortunately, many builders and owners don’t understand how Delay in Start-Up or DSU construction risk insurance coverage actually works and when this coverage can be activated.
For effective application of builders construction insurance like DSU coverage, contractors must understand its intricacies in order to successfully make claims and receive benefits.
What Is Delay in Start-Up Builders Risk Insurance Coverage?
One of the costliest losses any builder can encounter is a delay in the start-up of their project.
Regardless of the reason for the delay, a late start can affect the entire project all the way through to the end, pushing project completion beyond the estimated completion date.
Delayed projects can result in high financial losses for both contractors and owners that include lost earnings, issues with debt repayment, and many other fixed and soft costs associated with the project.
Because many of these losses come unexpectedly, it’s recommended that contractors assume a delay could happen and purchase DSU builders risk insurance.
The biggest concern when purchasing such coverage is understanding the fine details of how this type of builders construction insurance works so that losses are actually claimable.
If insured clients fail to implement the policy in the right way, they could end up with an uncovered loss.
Three Critical Factors To Successfully Claim DSU Benefits
To get proper protection from a construction risk insurance policy that includes DSU coverage, builders and owners must understand three critical details that dictate whether their loss is actually claimable or not:
- Coverage Parameters - The builders risk insurance policy must outline what qualifies as a covered loss, potential revenue loss, period of indemnity, and other details that are unique to every project.
- Up-to-Date Project Schedules - Builders must continually provide copies of current building schedules to construction risk insurance brokers since the most recent schedule prior to the loss will be used to determine if the loss is claimable.
- Past Date of Completion - Builders and owners alike must understand that a loss does not occur until after the project has surpassed the last known estimated date of completion.
Only with this critical information can a builder expect their DSU contractors insurance to benefit the project in the event a delay in start-up happens.
Final Thoughts About DSU Contractors Risk Insurance
Delay of start-up builders risk insurance is like the contractor's version of business interruption coverage that pays benefits when a claimable loss affects an owner’s ability to generate earnings from a property.
For this important coverage to be properly triggered, a number of critical details must be documented.
To be sure a DSU construction risk insurance policy will do what is expected of it, work closely with an experienced builders construction insurance broker and maintain open lines of communication with them throughout a project, from beginning to end!