What Is Builder’s Risk Insurance?

Builder’s Risk Insurance is a type of property insurance that protects your home against damage and loss.

When you’re building a new home or renovating an existing one, there are several risks to consider.

Your Builder’s Risk Insurance can protect against property damage and loss of income, as well as cover additional living expenses if the project is delayed.

It also covers liability claims against the contractor or subcontractor for injuries sustained on site during construction work.

You should consider getting Builder’s Risk Insurance when you obtain a building permit and start any construction, renovation or repair work on your property.

Builder’s Risk Insurance is not required by law but it is highly recommended that you take out this coverage to provide financial protection against damage and insured perils during the course of construction on your property.

Builder’s Risk Insurance Versus Contractor’s Insurance

General contractors liability insurance provides protection for negligence whereas builder’s risk insurance does not.

Claims that are covered under contractor’s insurance include property damage and bodily injury to third parties. For example, if someone visits the project site and trips and falls, any legal fees, medical bills, and settlements are covered by this type of insurance.

Builder’s Risk Insurance covers the building, materials, and job site but should be combined with general contractor’s insurance to provide full protection to you or your business. 

Our team of dedicated brokers at Capital Insurance can help navigate the wide range of policies available to help you protect your project or home renovation. Our comprehensive insurance packages are designed to give you peace of mind!

What Does Builder’s Risk Insurance Cover?

Builder’s Risk Insurance policies include different types of coverage, such as:

• Property damage caused by fire, explosions, extreme weather, theft, vandalism, and other perils.
• The costs and expenses associated with rental income, lost sales, real estate taxes, and interest on loans.
• Project-specific items like temporary structures, debris removal and disposal, scaffolding, and cleanup.
• Losses related to building and structures, materials, supplies, and equipment, costs and expenses, and unique items specific to the project.

Builder’s Risk Insurance does not cover personal property.

If you have a homeowners policy, your coverage includes personal property as well as the structure itself. This means that if someone breaks into your home and steals something, it’s covered by your insurance company.

If you rent an apartment or house and don’t have renters insurance (which is different from homeowner’s insurance), then your Builder’s Risk Insurance policy doesn’t cover any of your personal items..

Who Needs Builder’s Risk Insurance?

• Contractors
• Building Owners
• Engineers
• Project Managers
• Homeowners

Common Claims

• Wind damage
• Water leakage or seepage
• Fire or arson
• Vandalism
• Collapse