{"id":7919,"date":"2024-08-23T14:48:58","date_gmt":"2024-08-23T21:48:58","guid":{"rendered":"https:\/\/www.businessinsuranceusa.com\/news\/?p=7919"},"modified":"2026-06-01T13:53:15","modified_gmt":"2026-06-01T20:53:15","slug":"builders-risk-insurance-for-construction","status":"publish","type":"post","link":"https:\/\/www.businessinsuranceusa.com\/blog\/insurance\/builders-risk-insurance-for-construction\/","title":{"rendered":"Builder\u2019s Risk Insurance Explained: What It Covers, What It Excludes, and How to Protect Your Construction Project"},"content":{"rendered":"\n

<\/path><\/svg><\/span><\/span>Estimated reading time: <\/span>6<\/span> minutes<\/span><\/p>\n\n\n\n

When you\u2019re in the construction business, a lot can go wrong. Fires, severe weather, theft, and vandalism can damage partially completed work, delay your schedule, and strain your cash flow. Builder\u2019s risk insurance, also known as course of construction insurance, is designed to protect a project’s value while it is being built or renovated.<\/p>\n\n\n\n

What is builder\u2019s risk insurance?<\/h3>\n\n\n\n

Builder\u2019s risk<\/a> is a first-party property policy intended to cover direct physical loss or damage to a building or structure while it is under construction or renovation. Depending on the policy, it may also cover certain project materials and components to be installed, and may include extensions for items such as debris removal or materials in transit, often with sublimits.<\/p>\n\n\n\n

A practical way to think about builder\u2019s risk is as the property-protection component of a construction insurance program. It protects the project itself. It does not replace liability insurance.<\/p>\n\n\n\n

Builder\u2019s risk is not the same as general liability<\/h3>\n\n\n\n

Builder\u2019s risk generally addresses damage to the project property. Commercial general liability<\/a> is designed to address claims from third parties, such as bodily injury or property damage allegations. Most projects need both coverages to avoid gaps.<\/p>\n\n\n\n

What builder\u2019s risk can cover<\/h3>\n\n\n\n

Coverage depends on the insurer, the policy form, and the endorsements purchased. Many builder\u2019s risk policies are written broadly, but all policies include exclusions, conditions, and sublimits that matter during a claim.<\/p>\n\n\n\n

Common covered property and costs may include:<\/p>\n\n\n\n

Damage to the building or structure under construction<\/strong>
Many policies cover physical loss to the work in progress from covered causes such as fire, theft, vandalism, and certain weather events.<\/p>\n\n\n\n

Materials, supplies, and fixtures to be installed<\/strong>
Builder\u2019s risk often covers materials intended to become a permanent part of the project. Some policies also extend to materials in transit or at temporary storage locations, typically with declared values and sublimits.<\/p>\n\n\n\n

Temporary structures and certain jobsite property<\/strong>
Some forms can cover temporary structures and scaffolding, often as additional coverage with a separate sublimit. Always confirm whether trailers, forms, fencing, and scaffolding are included and, if so, under what limit.<\/p>\n\n\n\n

Debris removal<\/strong>
Many policies include debris removal coverage following a covered loss, subject to policy limits and timing requirements.<\/p>\n\n\n\n

Soft costs and delay-related expenses<\/strong>
Soft costs coverage is typically an optional endorsement. If purchased, it may help reimburse certain additional expenses that result from a covered physical loss that delays completion, subject to a separate limit and the policy\u2019s definition of the delay period.<\/p>\n\n\n\n

Common exclusions and gaps to plan for<\/h3>\n\n\n\n

Builder\u2019s risk is valuable, but it is not everything. Common items that may be excluded or limited include:<\/p>\n\n\n\n