What Is Builder’s Risk Insurance? A Guide for Contractors and Project Owners

What Is Builder’s Risk Insurance?


Builder’s risk insurance is a specialized form of property insurance that protects a construction project while it’s in progress. It’s designed to cover accidental physical damage to the project—whether that’s a new structure being built or major renovations underway.

This isn’t about liability or tools—it’s about the project itself.

Here’s What It Typically Covers:

  • The jobsite: Coverage applies to the structure under construction.

  • Off-site storage: Materials stored at another location before being delivered.

  • In transit: Materials being transported to the jobsite.

  • Multiple parties: Owners, general contractors, subcontractors, and sometimes suppliers.

Think of builder’s risk as property insurance for something that isn’t done yet. If something unexpected happens during construction—like a fire, theft, or weather event—the builder’s risk policy is what helps fund the repairs and keep the project moving.

Why a Single Policy for the Whole Team?

Instead of everyone (owner, GC, subcontractors) buying their own insurance, builder’s risk brings them all under one policy. That means:

  • More uniform coverage

  • Less confusion about who’s responsible

  • Often lower overall cost

Without a coordinated policy, delays and disputes can arise about who should pay when damage occurs. That can stall the project and create legal headaches.

Not All Policies Are the Same

Here’s where it gets tricky: there’s no “standard” builder’s risk form.

That means coverage can vary significantly from one insurer to the next. The only way to know what’s included—and what’s not—is to carefully review the actual policy language.

Final Thought: Don’t Wait for a Claim to Find Out

Builder’s risk insurance is critical—but often misunderstood. Whether you’re an owner or a contractor, don’t assume your policy covers everything you need.

  • Read it.

  • Know who’s insured.

  • Understand the exclusions.

  • Ask questions before the job starts.

Have questions about builder’s risk insurance for your next project?
Let’s talk through the details—so you’re not left guessing when it matters most.

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What Does Builder’s Risk Insurance Cover? (And What It Doesn’t)

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