Course of Construction
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Course of construction insurance, also know as a COC, is an insurance product that provides coverage on the construction of a building.
A COC can be purchased for the construction of a large commercial risk (such as a strip mall or apartment building), or it can be purchased for the construction of an insured’s home.
If an insured is using their own general contractor instead of building with a Home Builder, they can insure their property under a COC as long as the plumbing, heating, and electrical work are sublet to qualified tradespersons.
The rates and limits available range based on the fire protection status (unprotected, firehall protected, or hydrant protected) of the location.
The majority of COC policies need to be requested before any work has begun on the project, and coverage should be in place before breaking ground. Some Insurers allow for the foundation to be poured, requiring that the policy be purchased before framing begins. There are some markets that can insure a risk where the work has already begun, however the coverage may be limited and higher premiums may apply.
When requesting a quote on a COC, there are several pieces of information that will be required, including:
- name and address of the insured
- address of the location of the property being built
- loss payable
- total square feet above ground (once construction is complete)
- number of storeys
- amount of insurance required (total rebuild value of the property once construction is complete)
- construction start date
- construction completion date
You will also need to know the cost to build, in addition to the soft costs, where applicable. Some examples of soft costs include:
- loan interest
- property taxes
- design and consulting fees
- legal and accounting fees
- extension premiums
- refinance costs
- advertising and promotional fees
- costs to renegotiate leases
A COC policy includes several types of coverage, including:
- All Risk on the building
- Replacement Cost
- Debris removal
- Offsite coverage of supplies for the building (up to $5,000 with some Insurers)
- $1,000 deductible (minimum available)
- Fire department charges (up to $5,000)
- Commercial General Liability (CGL)
- single charge for CGL per policy (no extra charge if policy needs to be extended)
- may be purchased on an annual policy to cover liability and tools/equipment
Should you require a quote on your COC or if you have any questions regarding this product, please do not hesitate to contact us and speak with one our knowledgeable and friendly commercial insurance brokers!
Thank you,
The Costen Insurance Team