Fire insurance for buildings under construction

Why builders need fire shell insurance
An uninsured major fire in your future home could financially ruin you as a builder. Fire shell insurance provides financial protection if your construction project is damaged or destroyed by fire, lightning, explosions, or falling aircraft.

Coverage includes:

• The shell construction itself

• All building materials on the construction site

• Consequential damage caused by smoke or firefighting water

• Necessary cleanup and demolition costs

Combining fire insurance with building insurance

Banks usually require proof of fire insurance before granting a construction loan. Fire shell insurance can be taken out as a standalone policy or as an extension of construction all-risk insurance.

The fire shell insurance ends once the building is completed; at that point, homeowners building insurance takes over.

Tip: If you take out building insurance at the start of construction, fire protection for the shell is often included free of charge. Full premiums for building insurance are typically only due once the property is ready for occupancy.