Builders Risk and Construction Insurance

Builders risk insurance, also known as course of construction insurance, is property coverage for a building while it is being constructed, substantially renovated, altered, or repaired. Depending on the policy, it may cover the structure, construction materials, fixtures, machinery, and equipment intended to become part of the completed project.

The property owner, developer, or general contractor may be responsible for purchasing the policy. The construction contract should identify who obtains coverage, which parties must be protected, and who is responsible for deductibles. Lenders may also impose specific insurance requirements.

A policy may cover the building under construction, materials, supplies, fixtures, installed machinery, equipment, and certain temporary structures. Optional coverage may extend to eligible property in transit or stored away from the project site. Definitions, limits, and exclusions vary by policy.

Builders risk coverage may be available for additions, alterations, and substantial renovation projects. The policy should clearly address the value of the new work and whether the existing structure is covered. Minor remodeling may be handled differently from structural renovation.

Builders risk generally focuses on property that will become part of the completed structure. Reusable tools, mobile machinery, and contractor equipment may require separate tools and equipment, inland marine, or equipment coverage. Review our Contractors Insurance page for related protection.

Builders risk is primarily property insurance and generally does not replace general liability or workers’ compensation. Contractors and other project participants may need separate general liability insurance and workers’ compensation insurance.

Coverage is generally written for the anticipated construction period and ends according to the policy’s termination provisions. Events such as completion, occupancy, acceptance by the owner, sale, abandonment, or expiration may affect coverage. An extension may be necessary if the project is delayed.

The limit is commonly based on the project’s estimated completed value, including eligible labor, materials, fixtures, equipment, overhead, and profit. Land value is generally excluded. Soft costs, existing structures, debris removal, transit, and temporary storage may require separate limits or endorsements.

Coverage should generally be arranged before construction begins or covered materials are exposed to loss. Starting work or purchasing materials before the policy becomes effective can create an uninsured gap. Confirm the effective date and all binding requirements before the project starts.

Compare covered property, causes of loss, completed-value requirements, deductibles, off-site storage, transit coverage, delay provisions, soft-cost protection, testing coverage, exclusions, and termination conditions. Begin on the Compare Quotes page or use the Get a Quote page.