Builders risk insurance covers buildings and structures during construction or renovation against covered causes like fire, wind, theft, and vandalism, including materials on site and often in transit. It is project-specific, time-limited to the construction period, and distinct from general liability, which covers third-party claims rather than the project itself.
What builders risk covers
Builders risk protects the structure under construction and usually the materials, fixtures, and equipment to be installed, on site and often in transit or in temporary storage. Covered causes typically include fire, lightning, wind, hail, theft, and vandalism. It can extend to soft costs, the extra interest, fees, and lost income from a delay caused by a covered loss, which on a financed project can be as costly as the physical damage.
Who buys it and who is covered
Builders risk can be written by the general contractor or the project owner, and the policy commonly names the owner, the contractor, and the lender as interested parties. Contracts and loan agreements usually specify who must carry it and what limits and parties are required. Getting the named insureds and the limit right at the start avoids a dispute when a loss happens mid-project.
What it excludes
Builders risk is not a substitute for general liability and does not cover third-party injury or your faulty workmanship itself. Common exclusions and add-backs to check include flood and earthquake, existing structures in a renovation, theft of tools, and coverage that ends at occupancy or completion. Mismatching the policy period to the real construction timeline is a frequent and avoidable gap.
How we handle it
We size the limit to the completed value of the project and set the policy period to the real construction timeline, with extensions if the schedule slips. We name the owner, contractor, and lender as the contract requires. We add soft costs, flood, or earthquake where the project and location call for it. And we coordinate it with general liability so the project and the liability exposure are both covered.
