What Is Course of Construction Insurance?

Regardless of scale or complexity, construction projects face inherent risks from start to finish. Unpredictable weather events, accidental damage, theft, and liability claims all pose significant financial risks to construction projects. That’s why understanding "what is course of construction insurance" is essential for any construction project.

Course of Construction (COC) insurance is a specialized coverage designed to protect your project from inherent risks. It offers coverage for a wide range of potential risks, safeguarding your investment and ensuring project efficiency.

In this blog post, we’ll answer “what is COC insurance coverage,” and discuss why it's an indispensable tool for anyone involved in construction or renovation projects.

What is COC Insurance? 

Course of Construction Insurance is a specialized property insurance policy designed to protect construction projects during their development phase. It acts as a financial safeguard, covering potential losses that may occur from the project's inception to completion.

COC Insurance recognizes the inherent risks in construction sites, such as natural disasters, accidents, theft, vandalism, and even structural collapse. In case of unforeseen events, this policy transfers the financial burden from the construction or renovation project stakeholders to the insurance company, saving the former from significant costs.

In essence, Course of Construction Insurance offers peace of mind and financial security to all parties involved in a construction project, including owners, contractors, subcontractors, and lenders. It protects investments and allows operations to continue smoothly in the event of unforeseen obstacles, guaranteeing the project's successful completion.

Coverage Provided by COC Insurance 

Now that we've answered “what is course of construction insurance,” let's explore the specific coverage it offers to safeguard your construction projects. Course of Construction Insurance typically covers the following:

Damage to the Structure Under Construction

Like commercial property insurance, Course of Construction Insurance covers building structures throughout construction. It encompasses damage from a wide range of risks, including fire, lightning, windstorms, hail, explosions, vandalism, theft, and other covered events. Whether a partial or total loss, this insurance ensures financial compensation for repairs or rebuilding.

Damage to Materials, Equipment, and Temporary Structures 

Construction sites are dynamic environments filled with valuable assets beyond the structures themselves. This coverage extends protection to building materials, tools, machinery, and even temporary structures like scaffolding or construction trailers. If these items are damaged or lost due to covered risks, the insurance policy can reimburse the associated costs, preventing project delays and financial strain.

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Theft or Vandalism of Construction Materials and Equipment 

Unfortunately, construction sites are often targets for theft and vandalism. Course of Construction Insurance provides coverage for the loss or damage caused by these criminal acts.

Liability for Third-Party Bodily Injury or Property Damage 

Construction activities inherently carry the risk of causing injury or damage to third parties, such as passersby from neighbouring properties. COC insurance typically includes liability coverage, offering financial protection if your business is held responsible for such incidents.

Additional Coverages 

Some Course of Construction Insurance policies may offer optional coverages for specific risks, such as debris removal after a covered loss, soft costs incurred due to project setbacks, and pollution liability. These additional coverages can be tailored to the unique needs of your project, providing further protection.

Builder’s Risk vs Course of Construction Insurance 

Builder's Risk insurance and Course of Construction insurance are often used interchangeably because they cover similar items and events. Whether your coverage is called Builders Risk or Course of Construction insurance, carefully review the policy terms and exclusions to ensure they align with your specific project needs. The key is having comprehensive insurance protection that safeguards your investment and ensures your project's success. 

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Who Needs COC Insurance? 

Course of Construction insurance is not a one-size-fits-all policy. Different stakeholders involved in a construction project may require this coverage for various reasons. Let's explore who typically needs COC insurance and the benefits it provides to each party.

• Property Owners: COC insurance is a crucial safeguard for property owners’ investment. It protects them from financial losses due to damage or destruction of the property during construction. This ensures that they can meet their project goals even in the face of unforeseen events.
• General Contractors: As the project's primary manager, general contractors are exposed to significant risks during construction. Course of Construction insurance protects them from financial liabilities arising from property damage, theft, or accidents on the job site.
• Subcontractors: Subcontractors, who often specialize in specific aspects of the construction process, can also benefit from Course of Construction insurance. It protects their tools, equipment, and materials while on the job site and can also cover them for liability arising from their work.
• Lenders or Financial Institutions: If a lender or financial institution is involved in financing the construction project, they may require COC insurance as a condition for providing funding. This protects their investment and ensures that the project can be completed even if unforeseen events occur.

Protect Your Construction Project with KASE Insurance 

Now that you understand what is course of construction insurance, take the next step in safeguarding your project's success. KASE Insurance, an award-winning insurance brokerage, specializes in providing comprehensive Builder’s Risk or COC insurance solutions tailored to your specific needs.

Our team of experienced insurance brokers will assess your project risks, explain Course of Construction insurance coverage options, and help you secure the optimal policy to protect your investment. We understand the unique challenges of the construction industry and are committed to providing exceptional service and support throughout the entire process. Contact KASE Insurance today and let us help you build a solid foundation of protection for your project.