Builders Risk Insurance

What Is Builder’s Risk Insurance?

Each job comes with unique working conditions. This is especially true regarding construction. Developers, builders, contractors and even homeowners should understand how to insure construction sites with appropriate coverage in order to protect your employees, your customers, and yourself from unforeseen risks. Builder’s risk insurance will protect property, equipment, and personnel during the course of construction.








What Does Builder’s Risk Insurance Cover?

The typical builder’s risk insurance policy covers whatever goes into constructing the final product. It depends on the specific policy provisions, including cause of loss, but here is the typical builder’s risk coverage:

  • Property damage (Including What?)
  • Theft (in a gated construction zone)
  • Labor costs: What is this?
  • Certain perils of nature (Including What?)
  • Negligent workmanship and flawed materials or design
  • Concurrent loss: What is this?

Builder’s Risk Insurance Cost

Homeowners, contractors, ultimate owners, lending institutions or project owners can purchase builder’s risk coverage, and it typically costs 1% to 3% of the total construction budget.




Builder’s risk depends on many different factors, and is especially prevalent in severe weather-prone areas. A builder’s risk policy can last 3, 6 or 12 months, or can be extended at least once if the structure isn’t complete by the agreed deadline.

Note: The building insurance may terminate when the work is completed and the property is ready for use or occupancy.

What Does A Builder’s Risk Policy Typically Exclude?

Causes of loss and perils being insured against should be densely studied before any construction contract is drawn. However, they rarely are, which results in coverage problems. What’s usually excluded from a builder’s risk policy:

  • Accidents and injuries at workplace (liability risks)
  • Certain acts of nature (earthquakes, landslides, floods)
  • Suppliers of materials, architects, and engineers
  • Losses brought on by law, earth movement, nuclear hazard, war/military action, fungus, civil authority, contamination, or pollution
  • Losses from criminal, fraudulent, dishonest, or illegal acts (non-fortuitous)
  • Mechanical breakdown or wear and tear

An important consideration to make when choosing building insurance is whether or not the builder’s risk policy’s exclusions make exceptions for resulting physical loss or damage, not otherwise excluded. Typically, the more exceptions to exclusions, the better the policy.

How Can American Integrity Insurance Solutions Help You with a Builder’s Risk Insurance Quote?

American Integrity Insurance Solutions is an independent insurance consulting agency that partners with dozens of carriers to provide people with unbiased advice on a variety of insurance products.

Our team is readily available to craft a policy that custom fits to your needs. We promise to not only provide a policy fulfilling your specific needs, but also to help you understand how and what it protects you against.

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