(888) 900 0205Builder's Risk Insurance
Builder's risk insurance is a specialized type of property insurance that provides coverage for buildings under construction. It typically covers damages to the structure itself and materials, whether they're on-site, in transit, or temporarily stored elsewhere. The policy usually includes protection against risks like fire, wind, theft, vandalism, and other perils that can occur during the construction process.
This insurance is crucial for construction projects because it helps protect the financial investment in the project from unforeseen events that could cause delays or additional costs. Builder's risk insurance can be purchased by the property owner, general contractor, or developer, depending on the project's requirements and who holds the financial interest.
Coverage typically ends once the construction is completed and the building is ready for use, at which point other types of insurance, such as commercial property insurance, would take over.
Property Damage
- Structures: Damage to the building or structure under construction, including any partially completed work.
- Materials: Coverage for materials, supplies, and equipment (project‑related property scheduled on the policy, not necessarily all contractors’ tools/machinery) that are on-site, in transit, or temporarily stored at another location.
- Temporary Structures: Coverage for temporary structures like scaffolding, forms, or fencing that are part of the construction project. (temporary structures and off‑site storage often have lower sublimits or may need to be specifically included)
Natural Disasters
Common covered causes of loss on a builders risk policy include:
- Fire,
- Lightning,
- Explosion, and many types of
- Wind or
- Hail damage.
However, coverage for hurricanes, named storms, floods, and earthquakes is often limited, excluded, or available only by endorsement or a separate policy.
Theft and Vandalism
- Protection against theft of materials and equipment from the construction site.
- Coverage for vandalism that damages the project.
Debris Removal
- Many builders risk policies include a debris removal extension that helps pay to clear debris after a covered loss, up to policy limits.
Damage to Construction Equipment
- Builders risk mainly covers the structure and project materials. Some policies offer limited coverage for construction equipment on the jobsite, but contractors’ tools and equipment are usually insured under a separate policy such as inland marine policy.
Exclusions
It's important to note that builder's risk insurance usually doesn't cover everything.
Common exclusions include:
- Liability Coverage (unless added)
- General wear and tear
- Workmanship or design flaws
- Employee theft
- War and terrorism (Terrorism coverage may be excluded or offered separately)
- Earthquake (unless added as an endorsement)
- Mechanical breakdown
Builders risk does not cover jobsite injuries, workers’ compensation, or third‑party liability claims. Those exposures are handled by general liability and workers’ compensation policies.
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