Builders Risk Insurance provides coverage for buildings under construction, including materials and equipment. It’s typically purchased by contractors or property developers.
Builders Risk Insurance
What Is Builders Risk Insurance?
Builders Risk Insurance (also known as Course of Construction Insurance) protects buildings under construction or renovation from damage caused by fire, theft, vandalism, wind, and more. It can cover the structure itself, on-site materials, temporary structures, and sometimes soft costs.
Who Needs Builders Risk Insurance?
Construction is inherently risky. A fire, storm, or theft during a build can derail schedules, add major costs, and lead to lawsuits. Builders Risk Insurance helps ensure that a single incident doesn’t destroy your entire project timeline or budget.
Common industries that often require Builders Risk Insurance include:
- Property Owners
- Real Estate Investors
- Developers
- General Contractors (GC’s)
- Construction Managers
- Builders and Design-build Firms
- Architecture Firms
- Engineering Firms
What Does Builders Risk Insurance Cover?
Builders Risk Insurance typically covers:
- On-site damage to buildings under construction
- Construction materials and equipment stored on-site
- Temporary structures like scaffolding or fencing
- Fire, wind, theft, lightning, vandalism, and some water damage
- Optional: Soft costs like permit fees, design fees, and loan interest
What Doesn’t Builders Risk Insurance Cover?
While Builders Risk Insurance offers broad protection, it doesn’t cover:
- Normal wear and tear
- Employee injuries (covered under Workers’ Comp)
- Tools and heavy equipment (covered under Equipment or Inland Marine)
- Professional liability (requires E&O coverage)
- Earthquake or flood (must be endorsed or purchased separately)
How Much Does Builders Risk Insurance Cost?
The cost of Builders Risk Insurance varies based on factors like business size, industry, location, and claims history.
Key Cost Factors:
- Total construction cost
- Type of construction (wood, concrete, steel)
- Project duration
- Location and site conditions
- Coverage terms (including soft costs and extensions)
Typical Cost Range:
- Percentage: 1%–4% of total construction value
- Example: For a $5M build, expect $25,000–$100,000 in premium cost
Risk Management Tips
To minimize potential claims:
- Secure the construction site with fencing, surveillance, and controlled access.
- Store high-value materials in locked containers and off-ground when possible.
- Monitor weather forecasts and cover exposed areas during vulnerable periods.
- Implement strict subcontractor credentialing and safety compliance processes.
- Maintain up-to-date construction timelines and document any changes or delays.
- Conduct periodic safety and security audits during project phases.
Talk to An Expert
Our dedicated experts are ready to provide tailored insurance solutions to clients across a wide range of industries and specialized services.
Schedule a consultation to see how Alliance Risk can reduce your insurance risk.
– We look forward to partnering with you.