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What is covered by Builder’s Risk Insurance?

When it comes to Builder’s Risk Insurance, there is no one-size-fits-all policy. This can make it confusing and many times misunderstood.

Many people may not be aware of what Builder’s Risk Insurance is. So, we’re going to break it down for you.

Builder’s Risk Insurance protects you and your construction projects while they are being completed. The policy will go into effect as soon as the project is started when contracts are signed, and end when the project is finished. Sometimes, it is referred to as “course of construction” insurance.

So, what does it cover?

Usually, losses from things such as hurricanes, fires, theft, vandalism, and some others are covered. Things such as a flood are not usually covered, and you’ll need to purchase a separate policy for that.

Under the policy, the building, structure, and equipment are generally covered. Sometimes, the costs that incur when a loss causes a prolonging of construction are reimbursed too. If your policy doesn’t cover this, you can always add it as an extension.

Additional coverages, such as temporary structures and debris disposal, are often purchased as well.

What’s the difference between homeowner’s insurance and builder’s insurance?

Homeowner’s insurance is protecting your already built and constructed property. Builder’s risk insurance protects your structure and more while the project is happening, not after the fact. The losses that are and aren’t protected are very similar.

Do I need Builder’s Risk Insurance?

Your contractor most likely will not have builder’s insurance, because they are only liable for incidents caused by their negligence. So, if you want the extra protection from other losses, it might be a good idea to consider purchasing builder’s insurance.

As always, it’s a good idea to contact your agent when deciding on purchasing insurance. Feel free to contact us here or call us at (410)-742-5111 today.


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