Real estate investors looking to step up and become full developers of major infrastructure and commercial property construction projects are often surprised by the difference between investing in properties and improving them and redefining the landscape of a city with new buildings or even multi-property projects. While there is a lot the two investment strategies have in common, developers take on greater risks and typically reap greater rewards, so it’s no wonder so many investors look to step up to the role. Before taking on a project, it helps to start by understanding developer insurance requirements and the ways they manage your risks.
Necessary Coverage Types for Construction
Developer insurance is basically construction insurance, but scaled up for the scope of the project in cases where you’re building on more than one property in a single operation. Those coverage types include:
- Environmental protection
- Construction policies
- Flood insurance
- Blanket limit coverage
- Business interruption and risk insurance
In addition to these insurance types, complete risk management for the construction projects involved in your development may involve adding in one or more professional bonds. Construction bonds help streamline the cost of risk management by offering protection for clients or investors in ways that would burden a traditional insurance policy. It is important to get both when necessary, but luckily there are a lot of insurance providers who offer policies that meet developer insurance requirements alongside the bonds you need.