Builders Risk Insurance Basics

Builders risk insurance - also called course of construction coverage - protects a building while it is being built or renovated. Standard property policies are written for completed structures and leave a construction site exposed, so anyone financing or performing a build needs coverage designed for the period when the structure is incomplete and the site is full of materials.

What builders risk covers

• The structure in progress and the materials on site or in transit.
• Damage from fire, wind, hail, vandalism and theft, which are elevated on unoccupied sites.
• Scaffolding, temporary structures and site improvements.
• Soft costs such as additional interest, delay costs, and re-architecting after a loss, if added.

Premium ≈ completed value × rate (by construction type, term, location)

Who buys it

• The property owner, who has the most to lose if the build is destroyed.
• The general contractor, if the contract assigns that risk to them.
• The lender, who frequently requires proof of coverage before funding draws.

Key features to check

• Completed value. Coverage is usually written on the projected finished value, not the current spend.
• Term. Policies are written for a set period and are renewable; letting the term lapse mid-build is a common gap.
• Coverage basis. Replacement cost versus actual cash value changes the payout dramatically.
• Contents in transit. Confirm materials are covered while being delivered.

It is not liability insurance

Builders risk covers damage to the project itself. Injuries to workers fall under workers compensation, and third-party injuries need general liability. Most construction projects need all three.

Frequently asked questions

Does the contractor's policy cover the owner's building? Not necessarily. The owner should confirm whose policy responds and require proof of coverage.

Is a renovation covered? Yes, generally, though the rate rises with the amount of work and the occupancy during construction.

Estimate your project's premium with the calculator below.