What is Builders Risk Insurance?

When it comes to construction projects, there are a lot of things that can go wrong. That’s where builders risk insurance comes in. This type of insurance is designed to protect construction projects from a variety of risks and hazards that could cause damage or financial loss.

What Does Builders Risk Insurance Cover?

Builders risk insurance covers a wide range of risks and hazards that could occur during a construction project. Some of the most common risks that are covered by this type of insurance include:

Damage or loss caused by fire
Stolen or vandalized materials or equipment
Damage caused by high winds
Damage caused by hail storms
Damage caused by explosions

In addition to these risks, builders risk insurance may also cover damage or loss caused by water damage, earthquakes, and other natural disasters. It can also cover the cost of temporary structures, such as scaffolding, that are necessary for the construction project.

How Does Builders Risk Insurance Work?

Builders risk insurance is typically purchased by the owner or contractor of the construction project. The policy will be in effect for a specified amount of time, usually the length of the construction project. The cost of the policy will vary depending on a number of factors, including the value of the project, the location, and the types of risks that are covered.

If a covered loss occurs during the policy period, the insurance company will pay for the damage or loss, up to the amount of the policy limits. The policy may also cover additional costs, such as the cost of removing debris and cleaning up the site. In some cases, the policy may also cover losses that occur after the completion of the project, such as damage that is discovered during the warranty period.

Who Needs Builders Risk Insurance?

Builders risk insurance is typically needed by anyone who is involved in a construction project. This includes owners, contractors, and subcontractors. It may also be required by lenders or other parties that have a financial interest in the project.

Even if builders risk insurance is not required, it is a smart investment for anyone who is involved in a construction project. The cost of this insurance is often offset by the peace of mind that comes from knowing that your project is protected from a variety of risks and hazards.


Q: Is builders risk insurance the same as general liability insurance?

A: No, builders risk insurance and general liability insurance are two separate types of insurance. General liability insurance covers claims of bodily injury or property damage that may occur as a result of the construction project. Builders risk insurance, on the other hand, covers damage or loss to the construction project itself.

Q: Can builders risk insurance be purchased after construction has begun?

A: Yes, builders risk insurance can be purchased at any time during the construction project, although it is best to purchase it before construction begins.

Q: What types of projects are eligible for builders risk insurance?

A: Builders risk insurance is available for a wide range of construction projects, including commercial projects, residential projects, and renovations or additions to existing structures.

Q: How long does builders risk insurance coverage last?

A: Builders risk insurance coverage typically lasts for the length of the construction project, although it may be possible to extend the coverage if the project takes longer than expected.

Q: What should I look for in a builders risk insurance policy?

A: When purchasing builders risk insurance, it is important to look for a policy that covers the specific risks that are relevant to your construction project. You should also look for a policy that has adequate limits to cover the full value of your project.