Builders Risk Insurance

While being involved in the construction process for a new building or structure is exciting, there are numerous risks involved. After all, a variety of events could jeopardize the project’s success, potentially causing property damage and costly delays. According to recent National Fire Protection Association research, buildings under construction or renovation are more likely to catch fire than finished structures. Every year, fires cause more than $300 million in property damage. It is critical to have adequate coverage in place so that losses are minimized when such events occur. Fortunately, builders risk insurance can assist in this situation.

What’s Covered?

Builders risk insurance is a type of temporary coverage that protects a building or structure while it is being built. This type of policy generally provides assistance for damages caused by a variety of events, such as lightning, wind, hail, fires, explosions, theft, and vandalism. In these cases, builders risk insurance can help cover the costs of restoring any damaged property on the construction site. Property covered includes the building or structure itself, as well as equipment, materials, and supplies. Furthermore, if such property damage causes additional complications, such as project delays or lost income, builders risk insurance can help cover these costs. It is important to note that most builders risk insurance policies exclude coverage for damages resulting from specific events. Acts of terrorism, wear and tear, employee dishonesty, mechanical breakdowns, poor workmanship, and faulty materials or design are all common coverage exclusions.

How It Works

This type of policy is typically implemented on the same day that the associated project contract is signed. Coverage typically ends when the project is completed. However, not all builders risk insurance policies are created equal; different policies may have different triggers that signal the start and end of coverage.

Who Needs It?

Builders risk insurance is essential for anyone with a financial interest in the construction project, including the property owner, contractors, and subcontractors. With this in mind, construction employers like you cannot afford to overlook this type of coverage when securing project contracts for the development of new buildings or structures. However, purchasing builders risk insurance is only one component of your overall risk management strategy. Implementing effective loss control measures on the construction site is also critical for avoiding costly incidents and lowering potential claim costs.

For additional industry-specific guidance and insurance solutions, contact INSURICA today.

© 2021 Zywave, Inc. All rights reserved.

About the Author

INSURICA
INSURICA

Share This Story

Stay Updated

Subscribe to the INSURICA blog and receive the latest news direct to your inbox.

Related Blogs

5 Common Cybersecurity Mistakes and How to Avoid Them

October 1st, 2025|Blog, Risk Management, Trending|

All organizations, regardless of their size or industry, are at risk of being targeted by cybercriminals. These malicious actors can conduct cyberattacks, leading to significant financial, operational and reputational damage that can be difficult or impossible to recover from. Fortunately, solid cyber hygiene practices can reduce the likelihood of data breaches and other cyber incidents from occurring, and many of these practices are relatively low-cost and easy to implement.

FERPA and Data Privacy Risks: What Schools Should Know

September 23rd, 2025|Blog, Education|

FERPA and data privacy risks have become increasingly important issues for schools to understand and address. FERPA—the Family Educational Rights and Privacy Act—is a federal law that protects the privacy of student education records. However, as schools collect and store more sensitive data, FERPA and data privacy risks are also evolving. To stay compliant and protect students, school administrators must understand the law, recognize common risks, and implement practical solutions.

Group Health Premiums on the Rise: What Employers Need to Know

September 8th, 2025|Blog, Employee Benefits, Trending|

In 2025, rising group health premiums are becoming a central concern for employers. Carriers like UnitedHealth, Anthem, and CVS Health have issued projections showing significant cost increases—driven by escalating claims severity, specialty drug costs, and continued labor shortages across provider networks.

Go to Top