Are you considering a home addition or renovation project? Whether you’re adding living space to your home or remodeling your existing bathroom or kitchen, you’re going to need to think about broadening the scope of your insurance coverage.

Home construction and remodeling projects come with their own risks. Problems encountered during construction, on-site injuries, or “act of God” damage to structures under construction can all leave you open to substantial risk. Without the proper coverage, your out-of-pocket costs could easily balloon, and your much-anticipated project could run into substantial delays.

Here are a few ways you can protect your investment—both during construction and after completion.

Talk to Your Agent Early

An informed insurance agent is your best ally in any construction or remodeling job. And because most homeowner’s policies do not automatically cover all risks attendant to construction or renovation projects, it’s a good idea to meet with your agent during the planning stages. You and your insurer can then review the nature and scope of the project, including any unanticipated risks you may be taking on. Your agent can tell you what parts of the project are covered by your current homeowner’s policy and can advise on any additional coverage you may need to safeguard the project while in process.

Insuring the Project during Construction

As with any large project, home construction and remodeling can be problematic, and the potential pitfalls are many. Contractors could discover construction problems while in process, vehicles or parts of your existing home could be damaged, and contractors could be injured while on your property, just to name a few.

Here are some forms of coverage that can protect you from risk in such scenarios:

General Liability Insurance generally covers any liability that results from bodily injury and property damage incurred by the work of your contractors. It also covers personal injury costs if a third party being hurt while on the property (for example, if a visitor trips and falls over construction materials while on your land). This coverage, however, does not protect you against faulty or defective work performed by a contractor.

Hired Auto Insurance covers any damage to a contractor’s vehicles while on your property. This form of coverage can offer vital protection in the event your contractor uses a private vehicle in a working role, and their private insurance company denies a work incident claim on their personal auto policy.

Workman’s Compensation Insurance is mandatory for contractors who are performing skilled labor; however, if a contractor subcontracts to other workers who do not have adequate coverage, you could be at risk.  You should be certain that all workers (both contractors and subcontractors) have adequate coverage against on-the-job injury occurring on your property.

Professional Liability Insurance covers contractors who perform design-build projects and addresses covers the design and construction errors and omissions that might occur during and after the completed construction project. Professional liability insurance also covers 3rd party hired by the contractor such as engineers.

Builder’s Risk Insurance addresses the vulnerability of a structure or its materials during construction. It may be purchased either by you or the contractor and covers risks to work materials, fixtures, and equipment that may be damaged, lost, stolen, or vandalized while working on your property.

Know What’s Covered

Talk with your agent about what aspects of the construction or renovation job that are covered (and those that aren’t) to help safeguard against the most likely risks. It’s also important to ensure that your homeowner’s policy reflects the new construction and any added value it may bring to your home. An experienced agent can help you review you potential vulnerabilities and bundle coverage options in a way that saves you money.

At MAGIS we’ve built our reputation by helping clients safeguard their high-value assets. We can review your existing homeowner’s coverage against any future home improvement plans you may have, and make informed suggestions to help you minimize risk and maximize coverage throughout all phases of construction. Contact us today and discover what MAGIS can do for you.