Massachusetts Subscriber

A

The builders risk coverage form applies to the building or structure described in the declarations while in the course of construction. It does not contain the exclusion of foundations below the lowest basement (or, lacking a basement, below the surface of the ground) found in the building and personal property coverage form. In fact, the builders risk form explicitly states that it covers foundations: “1. Covered Property . . . Building Under Construction, meaning the building or structure described in the declarations while in the course of construction, including: a. Foundations; b. The following property: . . (3) Your building materials and supplies used for construction; provided such property is intended to be permanently located in or on the building…or within 100 feet of its premises.” Unlike the case with a completed structure, there is a time during the course of construction when the footings and slabs your insured would like to exclude are exposed to loss. For instance, fire or wind could destroy the forms for these items before the concrete is poured and bring about a legitimate builders risk loss.

If construction has not yet begun, the insured and the underwriter might be brought into agreement on writing an endorsement eliminating coverage of foundations and materials and supplies connected with them in exchange for an appropriate reduction in the amount of insurance. If construction has already passed the foundation stage, the insured has had the protection of the insurance while he or she needed it and there would be no justification for eliminating foundation values from the completed building value.

The same can be said for the asphalt blacktop. The builders risk coverage form responds to building materials and supplies used for construction, “provided such property is intended to be permanently located in or on the building or structure described in the Declarations or within 100 feet of its premises.” Perhaps the probability of loss to the material and supplies to be used in conjunction with the blacktopping is so remote as to represent a risk the insured prefers to carry him or herself. Again, if the underwriter agrees, the value of the blacktopping might be removed from the completed value of the building in a pre-construction agreement if the insured is willing to accept an endorsement excluding coverage of materials and supplies used in that operation.