Builder’s Risk

How Builder’s Risk Insurance Helps Protect Construction Projects & Your Bottom Line

Builder’s risk insurance, also known as course of construction insurance, is a specialized type of property insurance that helps protect buildings under construction. It’s essential in helping protect construction projects, but can be complex and often misunderstood. However, having a properly structured builder’s risk insurance policy can be crucial. In fact, it will serve as the backbone of a successful risk management program.

What does Builder’s Risk Insurance cover?

When embarking on a construction project, builder’s risk insurance can help protect materials, labor and equipment from potential damage caused by physical events such as fire, lightning strikes, vandalism, theft and explosions. It also covers any temporary structures built for the purpose of completing the project. Having this specialized coverage in place will not only safeguard the progress of the build but your bottom line as well. Without it, you could be left facing costly delays or profit losses due to repair bills or replacement costs.

This insurance helps protect construction projects from property damage due to:

Who Needs Builder’s Risk Coverage?

Any person or company with a financial interest in the construction project needs builder’s risk insurance. Some common people you may want to include on your policy as insureds include the:

Get the Right Coverage to Safeguard Against Property Damage, Costly Delays & Profit Losses

What Types of Property Does it Cover?

A basic policy helps cover buildings and structures under construction. It also helps protect:

What Does This Cover?

A  policy helps protect your construction projects from certain kinds of property damage. It can also help cover additional soft costs, or expenses not directly related to construction, if property damage causes a delay. This can include:

Because every construction project is unique, each builder’s risk policy is different. You can customize your policy to fit your project’s needs by getting coverage extensions. Common extensions include protection for:

Builder’s Risk Insurance Exclusions

Be aware that builder’s risk insurance may have coverage exclusions. For example, earthquake, flood, wind or beach zones are usually excluded from coverage, but you may be able to get extensions to help protect projects vulnerable to these kinds of risks.

Other insurance coverage exclusions include:

How Much Does Builder’s Risk Insurance Cost?

Every insurance policy is different, so costs vary depending on what you need. Your policy may need more coverage or you may need to add extensions to help protect your construction project. Generally, your insurance cost depends on the:

A good rule of thumb is to choose coverage limits that are equal to the anticipated cost of construction. So, if your construction project has a high cost, it could result in a higher insurance rate.
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