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A Builder’s Risk Insurance Policy is an excellent way to protect your investment in your construction project.  Let’s talk about the key characteristics of a policy:


  1. What is it for?
  2. Who can get it?
  3. What coverage does it give you?
  4. How long is it valid?
  5. How much does it cost?


What is a Builder’s Risk Insurance Policy for?


This insurance is specialized property coverage. It covers particular types of building projects.  These are new buildings and the renovation or restructuring of existing ones.  In general a policy protects the property, the equipment, materials and labor costs during construction.


Who can get it?


A Builder’s Risk Insurance Policy can be purchased by anyone doing building work that falls into the above description.  This could be a developer, contractor, sub-contractor or homeowner. The policyholder must have two years of experience in their area of expertise.  One policy can cover all the participants in the project. When a loss event occurs, the funds are paid to the mortgage or lien holder.  The money can be drawn from there when the repairs or replacement of property begins.


What coverage does it give you?


A Builder’s Risk Insurance Policy covers a range of loss events that occur in construction.  It is customized for your particular project and you include the coverage you need.  You don’t get a standard policy as such but there are many options that can be included.  These include:


  • Fire
  • Theft
  • Vandalism
  • Adverse Weather
  • Protection of Documents and Plans
  • Removal of Debris
  • Decontamination of a site
  • Protection of profits
  • Building Ordinance changes
  • Temporary structures (such as scaffolding)
  • Soft Costs


Speak with our agents at Contractor’s Liability. They will include the coverage that you need and alert you to anything that cannot be included in your policy.


How long is a policy valid for?


This is also known as Course of Construction Insurance because it covers the property during the construction process.  A policy is normally 3, 6 or 12 months in duration.  It can be extended if there have been no claims against it.  Once the building is completed and is ready for occupancy new coverage such as homeowners insurance is needed.


How much does a policy cost?


There are 3 factors that have a big influence on the cost of a policy.  These are:


  • The total value of the project. The policy must be valued at 100% of the replacement cost of the project at completion.
  • The location of the project.  Projects located at the coast or in tornado states carry additional risks such as flooding and wind damage.
  • The types of materials used. A wooden structure carries more risk; the quality of the finishes and materials will also impact costs.


In general a policy costs between 1 and 4% of the total project cost.


Get Your Builder’s Risk Insurance Policy today


Our agents at Contractors Liability can write up a policy for you today.  We have more than 20 years experience in the industry and represent A-Class insurance carriers. Call Contractors Liability on 866-225-1950 and get the right coverage at the lowest cost.


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