Builder's Risk Insurance for Projects Under Construction

What builder's risk covers

A project-specific or reporting-form policy can cover the work in progress, materials intended for the project, temporary works, and selected soft costs after a covered physical loss. The named property, covered causes of loss, valuation basis, sublimits, and extensions depend on the negotiated form.

Who buys the policy

The owner, developer, or general contractor may be responsible. The construction contract should identify the purchaser, insured parties, required limits, deductible allocation, waiver-of-subrogation expectations, and the point at which coverage ends. Lender requirements must be coordinated without treating a certificate as proof of every policy term.

Common gaps and exclusions

Defective design or workmanship, wear and tear, delay without covered physical damage, flood, earthquake, wind, water intrusion, testing, existing structures, and occupancy can be restricted or excluded. Builder's risk does not replace general liability, workers' compensation, professional liability, pollution coverage, or surety bonds.

What underwriters need for a quote

Prepare the location, construction type, hard and soft costs, project schedule, occupancy, contractor experience, protection controls, catastrophe exposure, lender and contract requirements, testing or commissioning details, and loss history. Pricing is project-specific; published averages are not a substitute for underwriting.

Sources

• Builders Risk Coverage Form — International Risk Management Institute
• Flood Maps and Risk Assessment — Federal Emergency Management Agency