Builders Risk Insurance Take the Risk Out of Builders Risk

The terms “builders risk” and “course of construction” insurance are used interchangeably to refer to property insurance that covers buildings under construction from perils like fire, vandalism, and some natural disasters.

Lenders usually require proof of builders risk insurance. For construction projects with little or no financing, builders may not be required to have a builders risk policy. However, even if builders risk insurance is not mandatory, it is always wise to have it to protect your project.

The property owner, general contractor, or developer will secure a builders risk policy. Responsibility, if any, is often included in the contractual or financial agreement.

Generally, coverage ceases when the construction project is complete and a certificate of occupancy is issued or sometimes when the purchaser accepts the finished work. Coverage can also end when a policy expires or is cancelled, of course. If a construction project is abandoned indefinitely, coverage may also cease.

A builders risk policy covers damages to a construction project (for one or more involved parties) while an installation floater simply covers the tools and materials of a single insured.