Builders Risk Insurance for Cannabis Businesses

What is Builders Risk Insurance?

Builders risk insurance, also known as a Course of Construction insurance policy is a special type of property insurance designed to cover buildings under the process of construction. Due to a variety of factors, builders risk insurance differs case by case. As a result, most policies differ from one another.

With that being said, a builder’s risk policy will generally cover the following:


Hard Costs such as building materials
Soft Costs such as building permits





Perils excluded:
  • Earthquake
  • Flood
  • Because the above risks are environmental in nature extensions are available for vulnerable regions.
Other common risk factors excluded from coverage typically are: 
  • Corrosion
  • Acts of terrorism and war
  • General wear and tear
  • Damage from a faulty design
  • Mechanical breakdowns due to faulty workmanship, materials, design, or planning

What is included in Builder’s Risk Insurance?

Business builder’s risk insurance in the cannabis industry provides coverage for structures currently under construction. Coverage also encompasses the equipment, materials, and supplies involved in the project.

When a construction project is delayed, losses may begin to mount. For example, property owners will still be responsible for paying taxes. Other expenses may include mounting loan interest, the loss of rental income, and other such expenses. The impact of these losses will mount over time, and the owner of the property may experience a significant financial loss.

Business builder’s risk insurance ensures that such financial risks are reduced or outright eliminated. While you may still feel financial pressure to a certain extent opting to invest in an insurance policy will significantly lessen the impact of a delay.

Extensions are also commonly included with most policies. Commonly, items such as construction forms, debris removal, scaffolding, and temporary structures are covered under an extension.

Green initiatives, such as upgrading a construction site to lessen its impact on the environment are also often covered by your policy.

What are the benefits of having Builder’s Risk Insurance?

It’s impossible to predict what can go wrong during a construction project. Your money is always on the line no matter how many safety nets are in place. As long as you have a financial stake in a construction project (this includes property owners, contractions, subcontractors, investors, etc.) it’s vital you invest in business builders and risk insurance.

Tips for Choosing Builder’s Risk Insurance

The following guidelines should help you to better identify the risks associated with your project and the best insurance policy for your business.

Find a Broker with Experience

No two construction jobs are the same. You’re going to need an agent or broker who has the experience and know how to tailor your coverage to fit your unique situation. An broker (especially one familiar with the cannabis industry will ensure you find the best deal at the best prices.

Understand When Coverage Begins & Ends

Typically, your insurance coverage will begin on the date the contract is signed. However, there may be stipulations within the contract that sets the start date at a later time. Know when your coverage begins to avoid any misunderstandings.

In the same token, your contract will also state when your coverage will expire. Builders risk insurance is temporary, so you should make plans to get permanent coverage well before your policy expires and before the end of the construction project.

Consider All Risks Before Choosing Coverage

Take stock of the exposures unique to your project. Don’t forget to calculate the risks involved with the transit of materials as well as the risks involved with temporary storage. Your choices are numerous. You could purchase a tailored plan with just a small amount of coverage, or you could purchase a more generalized plan for all your properties.

Read Your Policy Thoroughly

We can’t stress enough how vitally important it is to thoroughly read your contract before signing. Work with a reputable insurance professional and go through the policy in its entirety to ensure your buying the right insurance for your project. Understand the risks that will be covered as well as the exclusions.

Get a Builder’s Risk Insurance Quote

Do you have a project in the works? Than you need builders risk insurance, and we can help you find the right coverage for your business. Contact us today to receive a quote.

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