Contractors have the often-arduous task of completing a project on time and on budget. To meet this goal requires a certain amount of coordination and planning to maximize the amount and effectiveness of available funds. Insurance for contractors in Clifton New Jersey, such as builders risk, is purchased to help meet the needs of owners and contractors alike.
The owner and the contractor may both carry insurance
Because insurance coverage benefits both parties, an owner or the contractor may hold a policy for this purpose. In many cases where an owner holds the policy, it helps to have open communication and collaboration when claim preparation is performed. Most construction contracts place the responsibility on the contractor as they make most decisions pertaining to delivery and completion of the project.
It’s important to understand coverage application for the contractor and any subcontractors, including any rights as additionally named insureds. Considering that most policies include a duty to mitigate loss, which typically can include some immediate decisions and costs, the collaboration between owner and contractor and an understanding of recovery sources is often underscored. Ownership of the deductible can serve as an added incentive to mitigate further loss, often including a definition of a contractor’s responsibilities.
Delays and cost overruns can and will occur from time to time and this further demonstrates the need for insurance. In addition, contract clauses may also stipulate costs that are recognized under the contract where insurance does not apply. It’s important to read contracts carefully to avoid any confusion later on down the road.
Contractors and owners alike should be prepared to expect delays when unexpected weather conditions arise with an understanding of where these costs may be recoverable. Additionally, recovery sources generally cover the costs to repair damage to a project and return it to its previous condition.
Perhaps the most important reason to purchase insurance for contractors in Clifton New Jersey is that there are a number of financial pressures and liabilities in the construction industry. Obtaining insurance is the best way to ensure that, should the project run into a costly snag, there is compensation for the owners that doesn’t require added expense from the contractor.