What must be included in a builder’s risk insurance policy?

The inclusion of a maximum coverage limit in a builder's risk insurance policy is crucial because it defines the financial cap that the insurance company will pay in the event of a covered loss or damage during construction. This limit is predetermined and is essential for both the insurance provider and the insured, as it provides clear boundaries on the potential payout for losses, ensuring that there is a mutual understanding of the extent of the coverage.

Builder's risk insurance specifically covers buildings under construction, and without a maximum coverage limit, the policy could expose either the insurer to unmanageable risk or the insured to inadequate protection. Establishing this limit helps assess risks and makes it possible for builders and property owners to make informed decisions about the scope of their coverage based on the total value of the project and the associated risks.

The other aspects such as workforce management, liability coverage, and coverage for on-site accidents while relevant, do not strictly define the essential components expected in a builder’s risk insurance policy, thus making the maximum coverage limit a fundamental element.