Builder's risk insurance for construction projects

Also called course-of-construction. Builder's risk protects the building itself, the materials on site, and the equipment installed, from the moment ground is broken through the moment the property is occupied. Loss before completion is on someone; the right policy makes sure it's not you.

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01 Coverage scope

What builder's risk insurance covers.

A standard builder's risk policy responds to the claim types below. Exact wording varies by carrier; we read each form so you don't have to.

01. The structure under construction

The partially-built structure itself. Framing, sheathing, interior finishes, all covered up to the limit you select, which should equal the total completed value.

02. Materials on the job site

Lumber, drywall, fixtures, and all materials delivered to the site but not yet installed. Includes materials in temporary storage containers or yards.

03. Materials in transit

Most forms cover materials while being delivered from supplier to site, limited to a sub-limit, typically $50K-$100K. Critical for high-value systems like HVAC or elevators.

04. Fire, lightning, explosion

Standard named-peril coverage. Fire is the #1 total-loss driver during construction; a single event can level an 80%-complete building overnight.

05. Theft & vandalism

Theft of copper, HVAC units, appliances, and tools from the site. Vandalism to work in progress. Active construction sites are prime targets, this coverage is not optional.

06. Wind, hail, and storm damage

Covered on most forms, with a separate wind/hail deductible in catastrophe-prone states (typically coastal FL, TX, LA, SC). Named-storm deductibles are a separate class.

02 Exclusions

What builder's risk does not cover.

Every policy has carve-outs. Understanding them up-front is how you avoid the “I thought that was covered” call after a loss. Pair Builder's Risk with the right sister lines and the gaps close.

Excl. 01. Faulty workmanship & design

A wall built out of plumb that has to be re-done isn't a builder's risk claim, it's a workmanship issue. Professional liability or a performance bond is what responds there.

Excl. 02. Employee tools & contractor equipment

Builder's risk covers the project, not the contractor's own equipment. Excavators, skid steers, tool trailers, and scaffolding belong on an inland marine / contractors equipment policy.

Excl. 03. Flood and earthquake

Standard forms exclude flood (including mudflow) and earthquake. Coastal or seismic-zone projects need flood or earthquake endorsements, separately priced, often substantial.

Excl. 04. Delay in completion (soft costs)

Lost rent, extended loan interest, liquidated damages, these are soft costs. Standard builder's risk doesn't cover them; a separate delay-in-startup endorsement does.

Excl. 05. Occupied buildings & renovations beyond scope

Once a project is occupied or goes beyond the scope defined at bind, builder's risk may stop responding. Renovation projects in occupied buildings need specific renovation endorsements.

03 Trade fit

Who needs builder's risk coverage.

How the same policy sits differently across the common trades we place. The underwriting market that fits you depends on the work you actually do on the job site.

T·01. General contractors

GC typically buys the builder's risk, their name on the policy, owner as additional insured. New construction is the bread-and-butter use case. See general contractor insurance.

T·02. Developers & owners

On some projects the owner buys builder's risk and names the GC as additional insured. Contract language determines who buys.

T·03. Remodelers & renovators

Renovation BR requires specific endorsements, the existing structure exists before work starts, which changes coverage. Not every carrier writes it.

T·04. Custom home builders

Spec builds (building on spec before a buyer) are treated differently from contract builds. Vacancy provisions matter; policies need to match.

T·05. Solar & roofing installs

Large-scale solar arrays and commercial re-roofs often demand BR for the installed equipment value during the install window.

T·06. Site-prep contractors

Usually not the BR buyer, but excavation and demolition during early phases do need coverage coordination with the eventual BR policy.

T·07. Multi-family developers

Wood-frame multi-family is one of the most heavily underwritten risks in the market. Specialty markets only; rates can exceed 3% of hard costs in wood-frame states.

04 Cost

How much does builder's risk insurance cost for contractors?

Typical annual premium 1% - 3% of hard costs.

A typical $2M new-construction project on a 12-month build-out runs $6,000 - $40,000 in BR premium depending on construction type, state, and deductible. Wood-frame multi-family in a catastrophe-prone state is the upper end; steel-frame commercial in a mild region is the lower end. We shop specialty markets to match the project's real risk profile, not a one-size rate.

05 In the field

Builder's Risk claim scenarios, from real contractor jobs.

Names changed, trades and outcomes preserved. These are the four builder's risk calls we actually field.

Case 01 · General contractor

Fire destroyed a framed structure at 70% complete.

An overnight electrical fire leveled a 6,000 sq ft single-family build that was fully framed and partially roofed. Total loss on the structure. Insured value: $860,000.

Outcome

Carrier paid out $835,000 (policy limit less deductible). GC rebuilt on schedule; owner's permanent financing stayed intact.

Case 02 · Roofer

A windstorm mid-install ripped off a new commercial roof.

Severe thunderstorm during the last day of a 40,000 sq ft membrane roof install. Winds hit 85 mph. Partial tear-off, water damage to insulation and decking below.

Outcome

BR paid for replacement of damaged materials, cost of re-installation, and water damage remediation. $92K total claim; policy held the job on-schedule.

Case 03 · Developer

Copper theft three nights in a row.

Wood-frame multi-family project in an urban area. Over three nights, thieves stripped all copper piping from the first-floor units. Police reports filed; security wasn't adequate.

Outcome

BR covered replacement of materials and extended the deductible accordingly. Carrier's security consultant worked with the developer to install motion-activated floodlights and cameras, no further theft through completion.

Case 04 · GC

Hail damaged stored materials.

Golf-ball-sized hail in a Midwest storm damaged $48K of HVAC equipment and light fixtures stored on site in a covered area. Equipment was still in crates; insurance records were intact.

Outcome

Full replacement value paid out. Claim closed in 21 days. Project timeline slipped a week waiting on replacement HVAC; no contract penalties triggered.

06 Frequently asked

Frequently asked about builder's risk.

The questions contractors ask before they pick up the phone.

Q.01 What does builder's risk insurance cover?

Builder's risk covers the structure under construction, materials on site, and (with sub-limits) materials in transit. Standard perils include fire, wind, hail, theft, vandalism, and water damage. Flood and earthquake require separate endorsements in exposed regions.

Q.02 How much does builder's risk insurance cost?

Premium is typically 1% - 3% of the total completed construction value, spread over the project term. A $2M wood-frame build might run $20,000; a $2M steel-frame commercial build might run $8,000. Construction type, state, and deductible are the biggest drivers.

Q.03 Who buys builder's risk, the GC or the owner?

Contract language governs. On many projects the GC buys and names the owner as additional insured. On some, especially larger commercial and multi-family, the owner buys and names the GC. Always read the contract before quoting so limits and buyer match the requirement.

Q.04 Does builder's risk cover my tools and equipment?

No. BR is for the project, not the contractor's property. Tools, heavy equipment, trailers, and scaffolding belong on an inland marine or contractors' equipment policy. We bundle both lines when it makes sense.

Q.05 Can builder's risk cover renovation projects in occupied buildings?

Yes, but it needs renovation-specific endorsements, standard new-construction BR forms don't fit. Renovation BR treats the existing structure differently and requires careful underwriting. Not every carrier writes it.

Q.06 What is a delay in startup (DSU) endorsement?

DSU covers lost rental income, extended loan interest, and other soft costs that accrue if a covered loss delays completion. Standard BR doesn't include these, DSU is a separate, carefully-underwritten add-on that most lenders require on commercial projects.

Q.07 When does the builder's risk policy end?

At the earliest of: completion + final inspection, occupancy of the building, expiration of the policy term, or abandonment. After that, property insurance takes over. Timing the handoff matters, lapses create gaps.

Q.08 Is flood covered on builder's risk?

Standard forms exclude flood. If your project is in a FEMA flood zone or a coastal area, you need a flood endorsement or a separate flood policy through NFIP or the E&S market. Flood endorsements for active construction are limited and often expensive, plan early.

Q.09 Can I get a COI for builder's risk quickly?

Once bound and holder details are available, we typically issue BR COIs in under 60 seconds. If a project is starting Monday and you need proof of BR by Friday, call us Thursday, bind time varies by carrier and complexity but 1-2 days is typical.

Q.10 What if the project runs past the 12-month term?

Extensions are available but need to be requested before expiration. Post-expiration, coverage stops, any loss after the term is not covered. Carriers charge a pro-rata additional premium for extensions, and sometimes re-underwrite if the project has materially changed.

07 Related coverage

Pair builder's risk with the right sister lines.

The coverages contractors most often bundle with builder's risk. We build the program holistically: one quote, one renewal, one broker.

General Liability
General liability insurance for contractors, coverage for bodily injury and property damage on the job site. Required by most GCs.

Workers' Comp
Workers' compensation insurance for contractors, required in most states when you have W-2 employees.

Commercial Auto
Commercial auto insurance for contractor trucks, vans, and fleets. Placed with carriers that write contractor vehicle use correctly.

Umbrella & Excess
Umbrella and excess liability insurance for contractors, extra limits above your general liability and commercial auto.