construction budget insurance
I’m an architect, and I’m doing a new 2-family in Windsor Terrace. The clients just asked me if they should get construction budget insurance to protect themselves from overruns. I’ve never heard of this type of insurance. Does anyone have any experience with this?
I’m an architect, and I’m doing a new 2-family in Windsor Terrace. The clients just asked me if they should get construction budget insurance to protect themselves from overruns.
I’ve never heard of this type of insurance. Does anyone have any experience with this?
I have an Architect and also a great Contractor and as soon as I read your post I called them and asked them this question. I guess in the pause over the phone if I had been talking to them in person they would of been looking at me as if I had 3 eyes…lol
They havent heard of anything like that and I know they do some large projects. Projects always tend to run more over budget with change orders most of the time. You can incorporate a bonus / penalty clause in the contract but get ready to make it worth there while.
Never heard of it but some contractors have a clause if their prices go up (especially now with asphalt which changes every 14 days). I’ve never heard of anything for the homeowner. Since you haven’t signed the contractor (s) yet, then you can have language that they incur penalties if they go over the projected time. Of course if you are constantly making change orders, that’s not going to fly.
Thanks, slopefarm. That was my initial reaction, too.
I asked my insurance agent, and he’s never heard of this sort of thing either. He suggested maybe my client was looking for a performance bond, which effectively guarantees the contractor will finish the job, but does not control the budget.
Ah well…
Where was this product when we needed it?????
Actually, I can’t even imagine how it would work. So many decisions as to whether to spend more money on a job have a lot of gray area in them. No insurer is going to bankroll adding to a job. Inurers hate to pay even for the things they have to pay for. Surely, if there were such a product, the insurer would contest every change order as discretionary. I’m not in the business, so I may be missing something, but I just can’t see it.