12 ways Zurich is reinventing its Builders Risk coverage

For the past quarter century, Zurich North America has been proud to support the construction industry with a strong presence and unwavering commitment. Our Construction team has worked hard to help our customers embrace opportunities and challenges alike, demonstrating an eagerness to adapt and grow.

We are building upon that innovative spirit with enhanced Builders Risk insurance that improves upon an already robust product. Our new Master Builders Risk (MBR) and Project Builders Risk (PBR) policies, available beginning January 1, 2021, redefine our commitment to construction customers and distributors in exciting and bold new ways.

Two years in the making, these policies include 21 new, flexible forms and endorsements, dozens of enhancements and broadened language designed to simplify, streamline and innovate. These changes are the result of countless conversations we’ve had with our distributors and customers. They told us they wanted more flexibility and customization that allows for project-specific coverage needs, the elimination of common pain points, and an easier way to do business with us.

Our passion is finding better ways to serve our customers. Zurich continues to be an industry leader in construction, with the ability to offer limits of $1 billion or more. Our financial strength and versatility, together with25 years of experiencenavigating the sector, allow us to support a wide range of mid-sized and large construction customers.

Here are just 12 ways that our revamped Builders Risk coverage demonstrates our ability to evolve with our customers, to help them address the complexities of today’s marketplace and succeed.

1. Simplifying project administration in MBR policies. 

An MBR program, which insures multiple projects on a rolling basis, is designed to provide stability and coverage certainty with guaranteed rates, deductibles, and limits for many different perils and project types. It also needs to be easy to administer. Our new MBR policy delivers a streamlined approach to project administration, with built-in clarity for terms and conditions that our customers can understand. We have also simplified tasks associated with project enrollment, made endorsements more flexible and easier to add, and provided declarations that clearly summarize terms and conditions up front. Many of the additional bells and whistles are detailed in the points that follow.

2. Flexible solutions that mirror our complex world. 

Today’s marketplace demands an agile mindset and a willingness to adopt creative solutions that get the job done. Both our MBR and PBR policies reflect that need. Various coverage extensions — catastrophe zone definitions, sublimit flexibility and new coverages — can be as nimble as our construction customers.We’vebroadened language so coverage can be as tailored and/or specific as customers need it to be.

3. Recognizing the evolving role of project owners. 

Owner’s Extra Expense is a new extension we added to our MBR coverage form. It recognizes owners’ growing sophistication and engagement in the builders risk space and addresses their unique needs and administrative costs. The language is intentionally broad to deliver protection tailored to their role. Owner’s Extra Expense coverage includes additional project administration, legal and accounting fees, and advertising and permit expenses, allowing a cash-flow benefit by recouping these costs closer to the date of loss instead of needing to wait until the project is delayed past the anticipated date of completion.

4. Removal of percentage limitations. 

We have eliminated percentage limitations for several items in our Builders Risk forms, including debris removal, reward payments, contractor additional expenses and owner additional expenses.

5. Simplifying key exclusionary language. 

Our new forms eliminate the exclusionary language that limited some coverages in our earlier policies. Key areas now included in our Builders Risk forms: roadways, sidewalks and underground utilities are covered, provided they’re accounted for in the scope of a project. Also included: energizing transmission and distribution lines that are created for a project. We’ve also amended Dishonest Acts to clarify that all insureds’ employees, not just the named insured on the policy, are exempt from acts of vandalism under the exclusion.

6. A new approach to LEG 3. 

LEG 3,aka the cost of correcting or making good, is an endorsement that narrows the policy’s automatic exclusion to provide broader coverage for faulty design, materials and workmanship during the course of construction, as defined under the Builders Risk policy. The LEG 3 endorsement available on our new Builders Risk forms offers broader flexibility and clarity for deductibles, aggregates, and potential sub-limitations of coverage to faulty or defective parts or work. When a sublimit is shown, our new policy clarifies the extent to which it applies, allowing us to provide broader coverage on otherwise insurable scopes of work.

7. A declarations page that simplifies the MBR experience. 

The declarations page on our MBR policies now better outlines the details of the coverage for each project, clarifying how it will be covered under the program. A flexible project enrollment feature means projects can be covered via project certificates, total project value reporting, gross receipts reporting or a combination of the three. What’s more, the declarations page will reflect the tailored solutions that our forms can provide, with specific, helpful information. Most exciting is our renewed ability to certificate projects to the program without the need for policy issuance and checking processes.

8. Recognizing natural catastrophe challenges for MBR customers. 

Our new MBR declarations page provides the ability to target natural catastrophe challenges within regions, not just the traditional county by county approach. This recognizes that customers may face evolving geographic climate risks, especially given the acceleration of severe weather events across the country.¹As before, Zurich also can offer significant capacity in high-hazard zones.

9. One deductible covering two or more policies. 

We can now offer a single deductible for “all other perils” when Builders Risk customers have two or more separate Zurich products within the construction property space.

10. Phased turnover endorsement addresses the realities of construction dates. 

We made several changes to our Multi-Phase Construction endorsement, which can be attached on a PBR basis or on a certificated project enrolled in an MBR. It's been available before, but our new endorsement better recognizes the evolving challenges of complex projects.

First, we relaxed the restrictions that define when coverage ends, because we recognize that a major project rarely concludes on a date that was projected months, if not years, earlier. Coverage ends when the policy expires or is cancelled (as with earlier forms), or when the actual date of phase is completed, accepted by the owner,andwhen the project has been permanently insured under fixed property coverage by the owner. This ensures coverage continuity until the project is properly insured elsewhere.

Second, we eased restrictions on how customers report various phase updates to us. Coverage will no longer be restricted based on the original phase dates reported in the initial construction schedule, but rather, customers are merely required to provide updated schedules as soon as practicable. We understand that a phased project is continuously evolving, and our new endorsement allows Zurich to evolve with it — without our customer needing to worry about lapsing Builders Risk coverage.

11. An MBR certificate that offers customized, additional coverages.

We enhanced our MBR certificate to offer four additional coverage extension options, as needed per project: Contractors Equipment Coverage, Existing Real Property Coverage, California 7105 Catastrophe Perils, and Startup and Hot Testing Coverage. Each project certificate covers a specific project for its duration and the certificate declaration can be customized in a variety of ways, preventing the need to thumb through endorsements to verify coverage applicability.

12. Claims preparation expenses now include brokers’ fees. 

We broadened the language in our claims preparation expense to include costs that distributors incur while helping a customer settle covered claims.

These are just a dozen reasons why our new Builders Risk products are designed to supply solutions, not roadblocks, as our customers navigate an evolving and complex marketplace.

Learn more about Zurich’s Builders Risk program: Download our fact sheet for additional information or reach out to your local Zurich underwriter.

1.“Billion-Dollar Weather and Climate Disasters: Overview.” National Centers for Environmental Information. National Oceanic and Atmospheric Administration. 7 October 2020.