Builder’s risk insurance, sometimes referred to as construction insurance, covers a contractor’s property, material and equipment relating to a building or project under construction. It can be used to cover ground-up new structures or the renovation of existing structures. The coverage typically continues until the building project is complete and is signed off on by the owner. 

There are no standardized policy forms for builder’s risk insurance because every construction project is different. As a result, this type of insurance is often misunderstood and deemed overly complex by contractors.

A builder’s risk policy assures that you won’t have to foot the bill for financial losses in the event of:

Damage to a Structure in Progress

Builders risk can help with teardown, clean up, and restart of work should fire or vandalism destroys work that has already completed on the insured project.

Onsite Theft

It is not uncommon for valuable tools, expensive copper wiring or other materials, equipment, or supplies to be stolen from a project site. When assets go missing, builder’s risk can help cover the losses.

Damage from Weather Events

Builders risk helps cover losses from damages to structure, materials, and supplies caused by hailstorms, windstorms, and rainstorms during a build. This policy helps with costs for cleanup and repair of a non-severe weather event that may damage the insured project. 

Builders risk is a comprehensive insurance policy that covers all of the parties involved in a project, including:

  • general contractor
  • property owner/ developer
  • subcontractors
  • banks funding construction

If an unexpected accident happens during the course of construction, each of these parties could be facing a financial loss. Insuring everyone under the same policy covers everyone’s interests and helps ensure there are minimal disputes or finger-pointing along the way.

Builders risk insurance is an essential coverage for projects that are in progress. It’s typically the responsibility of the general contractor or the owner/developer to purchase a policy that will cover losses for all who have a vested interest in the project during the course of construction.

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