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What is Course of Construction Insurance?

Course of Construction Insurance is property replacement coverage. You can purchase it for certain types of building projects. You’ll also it as Builder’s Risk Insurance.  Its purpose is to protect your company from unexpected damages that can erode your profits during the construction process. In this article we’ll look at:

  • Applicable types of construction projects
  • The coverage it provides
  • When you need it, and
  • Who should get it


Types of projects

The following types of building projects benefit from Course of Construction Insurance:

  • Renovation and refurbishment of existing buildings
  • Restructuring of buildings (such as the removal of load bearing walls), and
  • Construction of new buildings, from the ground up

Builder’s Risk Insurance is available for construction projects of all sizes, from multi-building developments to additions by homeowners.


What coverage does Course of Construction Insurance provide?

In general terms, this insurance gives protection for the costs involved in the construction process.  This includes the use of materials and equipment, and the equipment included in the building.

There is no “standard policy”. Each considers the particular needs of an individual project and/or client.  The policy is flexible, and includes items by endorsement. The policy includes the following items:

  • Property Replacement. This is the primary purpose of this insurance. It provides replacement coverage equivalent to the total cost of the construction.
  • Removal of Debris. If an accident occurs, for which you have coverage, the policy covers the costs of debris removal.
  • Theft of tools, equipment and materials. Theft is a common occurrence on a building site.  A Builder’s Risk policy could pay replacement costs.
  • Soft Costs.  This refers to costs such as architects, lawyers, expediters, and marketing.
  • Adverse Weather. Damage caused by high winds or hail could be included in a policy.
  • Fire. A fire on site can cause substantial damage.  It is reported there are more than 6000 fires on construction sites every year.
  • Protection of equipment to be added. Examples of these are HVAC systems or elevators.

These are only some of the examples of what a policy can include.


When do you need it?

Course of Construction Insurance is literally that: it provides protection during the building process.  A policy can be either 3, 6 or 12 months in duration and it has a start and end date.  It is possible to get an extension in some circumstances if the project is running over.  Once the project is completed this insurance must be replaced by other property insurance.


Who Can Get a Builder’s Risk Policy?

A policy typically covers all participants in a project such as the developer, contractor, sub-contractor, lender, and owner.  All of these players have a financial interest in the project and can suffer losses if something goes wrong.


What else should you know about Course of Construction Insurance?

This is specialized property coverage that is customized for your project.  This means it is best to speak to the experts. Our agents at Contractors Liability will talk you through all the policy options and alert you to any conditions or exclusions.  Our commitment is to get you the right coverage at the lowest price possible.  Call Contractors Liability on 888-819-1228.

Avatar for John Brown
Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.