Construction Risks FAQs

• What is the process for applying for Builders Risk Insurance?
• How does the University and the General Contractor receive confirmation of coverage?
• What if the project is over the policy limit?
• What if the project goes over the policy limit during the course of construction?
• How does the premium get billed to the project?
• When does Builders Risk insurance begin and when does it terminate?
• What is the deductible and who is responsible for it?

1. What is the process for applying for Builders Risk Insurance?
   

   The application must be completed by the Project Manager or designee and submitted to Aon within ten days prior to the anticipated date of commencement work.

   Applications must be submitted in a timely manner which will allow for a reasonable amount of time for the application to be approved and issuance of coverage confirmation. Builder's Risk coverage must be confirmed prior to the commencement of the project.

2. How does the University and the General Contractor receive confirmation of coverage?

   Projects under $10 million - Aon will provide notification of approval by signing and returning the application to the Project Manager or designee with a Certificate of Insurance which should be provided to the General Contractor.

   Projects over $10 million - Aon will provide notification of approval by signing and returning the application to the Project Manager or designee with a certified Builder's Risk Underlying Declaration and an Insurance Summary. The campus is responsible for providing this information to the General Contractor as needed.


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3. What if the project is over the policy limit?

   The project must be submitted to Aon for prior approval for submission to the insurance carrier. If the carrier is unable to provide sufficient limits, Aon will look for other interested carriers to provide the insurance for the project. Sufficient lead time is required when a project is over the policy limit to enable securing the proper insurance for the project.

4. What if the project goes over the policy limit during the course of construction?

   Aon must be notified immediately and the carrier advised accordingly. Additional premium will be charged upon final audit at the end of the project.

5. How does the premium get billed to the project?

   At coverage inception, a deposit premium will be charged based on the estimated construction cost. The invoice is paid through Office of the President, Risk Services, and recharged to the campus/hospital location to the account number indicated on the Application. Upon termination of the coverage, final audit determines additional premium based upon final construction costs and duration of project. Projects under $10,000 are not subject to final audit or additional premium.

6. When does Builders Risk insurance begin and when does it terminate?

   Coverage for any individual Insured Project shall attach as of the date declared and shall continue in full force and effect until one of the following occurs:

   • Substantial Completion of the Insured Project;
   • Notice of Completion has been filed;
   • Sixty (60) days after the/all building(s) included within the contract or project has/have been occupied in whole.