Policies for Construction Projects
Similar to the way commercial construction financing differs from residential (owner-occupied) construction financing, the way the insurance coverage works is also quite different when it comes to building a house for commercial vs. owner-occupant purposes. Whereas traditional renters and homeowners insurance policies will cover the land acquired and being built on by an owner-occupant under the policy holders' name, the same insurance will not cover the land when owned by a business entity for business purposes. For that reason I had to take out a Commercial Insurance policy on behalf of Oakley Home 2 LLC as the property owner and developer of the home to be built. This covers all things not directly associated with the building of the structure itself, which in both commercial and residential scenarios, is covered by the builder's risk insurance policy carried by the General Contractor throughout the duration of construction. Overall, the commercial insurance coverage policy is quite a bargain when considering the protection it provides, so it should be a must have for anyone venturing into real estate development and have been told as much by other developers who have helped educate me in the past.