Builders Risk Insurance, also known as Course of Construction Insurance, is a specialized property insurance policy designed to protect buildings under construction. It covers structures, materials, and equipment on-site from risks such as:
- Fire
- Theft
- Vandalism
- Wind, hail, or lightning
- Certain types of water damage
It typically does not cover liability, accidents involving workers, or damage due to poor workmanship. Additional endorsements may be available to expand coverage.
When Is Builders Risk Insurance Needed?
Builders Risk coverage is essential for any project under construction or major renovation. You may need it if you’re:
- A homeowner building a new house
- A contractor working on a remodel or addition
- A business owner expanding or constructing new property
- A property developer taking on a new construction project
In many cases, lenders and municipalities require proof of Builders Risk Insurance before work can begin.
Who Should Carry the Policy?
Usually, the owner of the project, general contractor, or developer purchases the policy. It’s important to have a clear agreement in place about who is responsible for carrying this coverage.
What Does It Typically Cover?
A Builders Risk policy can include coverage for:
- The building under construction
- Temporary structures (like scaffolding)
- Building materials on-site, in transit, or temporarily stored off-site
- Soft costs such as lost sales, rental income, or additional interest on loans due to delay (when added)
Final Thoughts
Builders Risk Insurance is a critical part of risk management for construction projects. Without it, a fire, storm, or theft could result in massive out-of-pocket expenses and project delays.
If you’re starting a construction project—big or small—our team at Ameriguard Insurance can help you determine if Builders Risk Insurance is right for you and tailor the coverage to fit your needs.