Builder'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 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.

Natural Disasters

Fire
Windstorms
Hail
Lightning
Explosion
Hurricanes
Floods (may require additional endorsement)

Theft and Vandalism

Protection against theft of materials and equipment from the construction site.
Coverage for vandalism that damages the project.

Debris Removal

Coverage for the cost of removing debris after a covered loss, such as clearing away debris after a fire or storm.

Damage to Construction Equipment

Coverage for damage to construction tools and equipment, though this might sometimes require additional coverage or a separate 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
Earthquake (unless added as an endorsement)
Mechanical breakdown

Each policy can vary, so it's important to carefully review the terms and conditions and discuss them with an insurance professional to ensure adequate coverage for the specific needs of the construction project.