In the construction and installation industry, protecting materials, equipment, and unfinished structures from potential risks is essential. ACORD 147 – Installation/Builders Risk Section is a key insurance form used to provide insurers with detailed information about projects requiring builders’ risk or installation coverage. This form helps ensure that construction projects and materials are adequately insured against damages or losses before completion.
Whether you are a contractor, property owner, or insurance professional, understanding ACORD 147 is crucial for securing proper coverage. This article will break down its purpose, key sections, and best practices for completing it accurately.
What Is ACORD 147?
ACORD 147 is a standardized form used to provide insurers with details about installation and builders’ risk coverage. Builders’ risk insurance covers buildings under construction, while installation coverage protects materials, fixtures, and equipment awaiting installation or in transit to a job site.
The form helps insurers assess the risks associated with a construction or installation project, ensuring appropriate coverage terms. Given that the U.S. construction industry exceeded $2 trillion in the first half of 2024, protecting ongoing projects is more important than ever. ACORD 147 ensures businesses have the necessary coverage to mitigate financial risks from fire, theft, vandalism, or weather-related damages during construction or installation.
Key Sections of ACORD 147
ACORD 147 consists of several sections that capture essential information about the insured project, coverage requirements, and risk factors. Ensuring accurate completion of this form can be complex, which is where insurance business back office services play a vital role in streamlining documentation, verifying details, and assisting with policy submissions.
Project & Insured Information
This section collects the name of the insured (contractor, developer, or property owner), project location, and key contact details. It ensures the insurer knows who is responsible for the policy.
Coverage Details
The form outlines the specific type of coverage being requested—whether it is installation coverage for specific materials or builders’ risk insurance for the entire project. It includes:
- Coverage limits for property, materials, and equipment.
- Duration of coverage, typically lasting until project completion.
- Covered risks, such as fire, theft, vandalism, or natural disasters.
Construction & Installation Information
This section captures essential details about the project, including:
- Type of construction (e.g., wood, steel, or concrete).
- Materials used and their estimated values.
- Fire protection and security measures in place.
Transit & Storage Details
If materials or equipment will be transported or stored off-site, this section provides information about:
- The method of transportation.
- Storage conditions and security measures.
- Coverage limits for items in transit or storage.
Loss Payee & Additional Interests
This section lists any additional insured parties, such as lenders, subcontractors, or suppliers, who may have a financial interest in the project.
When Is ACORD 147 Used?
ACORD 147 is essential in various scenarios where builders’ risk or installation coverage is required. Common use cases include:
- New construction projects – Builders’ risk coverage is needed for structures under construction.
- Installation of equipment or materials – Ensures protection for materials and fixtures before they are permanently installed.
- Renovation and remodeling projects – Covers risks associated with construction work on existing buildings.
- Temporary storage of materials – Protects items stored off-site before installation.
- Large-scale transportation of construction materials – Provides coverage for materials while in transit.
By submitting ACORD 147, businesses and insurers ensure that construction projects and installations are adequately covered from start to completion.
Best Practices for Completing ACORD 147
To ensure accurate coverage and avoid claim issues, follow these best practices when completing ACORD 147:
- Provide detailed project information – Include precise construction details, materials, and values to ensure proper risk assessment.
- Verify coverage limits – Ensure the requested coverage limits align with project costs and potential risks.
- List additional insured parties – Identify all stakeholders with financial interests in the project to avoid coverage disputes.
- Document security measures – Highlight any fire protection, theft prevention, or weatherproofing measures to qualify for better policy terms.
- Submit the form promptly – Ensure ACORD 147 is completed before construction or installation begins to prevent coverage gaps.
By following these steps, businesses can secure comprehensive coverage and avoid unexpected financial losses during construction or installation projects.
Conclusion
ACORD 147 – Installation/Builders Risk Section is a crucial tool for contractors, property owners, and insurance professionals to secure appropriate coverage for construction projects and material installations.
By accurately completing this form, policyholders ensure that their projects remain protected from unforeseen risks, reducing financial liabilities. Understanding ACORD 147 and following best practices for completion can streamline the insurance process, helping businesses safeguard their investments and complete projects with peace of mind.
