What this coverage is
Builders risk insurance, sometimes called course-of-construction coverage, helps protect a project while it is being built or renovated. It commonly covers the structure itself along with materials, fixtures, and equipment intended to become part of the project.
Policies are typically written for the duration of the project and end when construction is complete and the structure is occupied or accepted. Coverage can often be extended to materials in transit or at temporary storage sites.
Who commonly needs it
Owners, general contractors, and developers commonly arrange builders risk coverage for new construction and major renovation projects, and lenders frequently require it.
Where this coverage commonly fits
Contract-driven — coverage that is often required by contracts, clients, landlords, or lenders. Builder's risk is commonly required by construction contracts and lenders for projects under construction.
- General contractors and builders
- Property developers
- Owners undertaking major renovations
- Real-estate investors building or rehabbing
- Specialty contractors on large projects
What it may cover
- The structure under construction against covered perils
- Materials, supplies, and fixtures on site
- Certain materials in transit or at temporary storage
- Damage from fire, wind, theft, and vandalism, subject to terms
- Soft costs and lost income, when those options are added
What it typically excludes
- Faulty workmanship or design, in many cases
- Wear, tear, and gradual deterioration
- Tools and equipment of contractors, which inland marine may address
- Earthquake and flood, unless added
- Losses after the project is completed and accepted
Hypothetical claim scenarios
These illustrative examples are for general understanding only. Coverage depends on the specific policy terms, conditions, and exclusions.
Fire during construction
A fire damages a structure mid-construction. Builders risk may help with repairs and replacement of covered materials, subject to policy terms.
Theft of materials
Building materials are stolen from a job site. The policy may help replace the covered materials, subject to deductibles.
Storm damage to the project
A windstorm damages a partially built structure. Coverage may help with the resulting repairs, subject to terms and exclusions.
What commonly affects cost
- Total completed value of the project
- Construction type, location, and duration
- Scope of perils and added options
- Security and safety measures on site
- Selected limits and deductibles
How much does it cost?
On average, many businesses pay roughly 1%–4% of construction cost for the project term for builders risk insurance. That figure is a general national average only — your actual premium is set during underwriting.
- Builders Risk Insurance1%–4% of construction cost for the project term
These are general national averages shown for comparison only — not a quote. Actual premiums vary widely with underwriting and depend on the factors above and the specifics of your business, including size, revenue, location, claims history, and the limits you choose. See how we estimate costs.
Industries where this coverage is common
Coverage needs vary business to business — most companies consider this protection regardless of industry. These are simply the industries where we see it most often.
See how this coverage works in your industry
A few examples from the business types we cover — this coverage applies well beyond the industries shown here.
Don't see your business type? Browse all industries we cover — coverage recommendations are tailored to every operation.
Frequently asked questions
Who should buy builders risk insurance?
Owners, general contractors, or developers commonly arrange it depending on the contract. Lenders frequently require builders risk on financed projects.
When does builders risk coverage end?
Coverage generally ends when the project is completed and the structure is occupied or accepted, at which point a permanent property policy commonly takes over.
Does it cover contractors' tools?
Contractors' tools and equipment are commonly covered under inland marine rather than builders risk, which focuses on the project and its materials.
Does builders risk cover faulty workmanship?
Faulty workmanship or design is commonly excluded, though resulting damage may be treated differently depending on the policy. Review terms carefully.
Can soft costs be covered?
Many policies allow you to add soft costs and lost income, which can help with delays caused by a covered loss, subject to terms.
How do I get a quote for this coverage?
Call The Southern Agency at 1-800-777-1872 or request a quote online, and an advisor can help tailor coverage to your business.
Related coverages
- Commercial Property Insurance Coverage for buildings, equipment, inventory, and fixtures against covered perils.
- Inland Marine Insurance Coverage for movable property, tools, and equipment in transit or off-premises.
- Equipment Breakdown Insurance Protection against sudden mechanical or electrical breakdown of essential equipment.
- General Liability Insurance Foundational protection for third-party bodily injury, property damage, and advertising injury claims.