How to calculate the premium for a builder's risk liability?

Question

Hi, my name is luis, I`m a quantity suerveyor student and I'm currently searching for the way of budgeting the premium for a construction bulder's risk liability insurance, i need to know what are the facts that influence the price and how to determine this premium. I hope you all have a great day, talk to you soon

Answer 1

No such horse, as builder's risk liability.

There's Builders Risk, which is a PROPERTY coverage, and then there is liability, and there are several ways to write it - the OWNER can do it, or the CONTRACTOR can do it.  

For the Builder's Risk Property, there are two ways to do it - a flat rate per $100 of completed value, for ONE SPECIFIC structure, for a pre-determined period of time (not necessarily 365 days!), OR, for contractors that have several starts running at a time, a blanket reporting form.

Pricing is influenced by location, perils insured against, type of construction (residential or commercial), time frame of construction,  building materials, any materials limit for materials on site but not added yet, etc.    

For a one-shot builder's risk, it's payable in full, before ground is broken.  For a reporting form, the premiums are calculated every reporting period - monthly for the bigger guys, quarterly for the smaller guys.

Liability is based on class of work, payroll, amount subbed out, gross sales, and units.  

The property part is pretty simple.  The liability can be pretty complex.   And you have to include workers comp, if you're doing this for the general.