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Builders Risk Insurance

Often referred to as “course of construction” insurance or simply “Hazard” insurance, Builders Risk policies cover a construction project while it is built including the materials, supplies, equipment and other costs associated with completing the project and is an essential form of coverage as part of a comprehensive risk management program.

Who's It For?

Builders & Contractors

As a builder or contractor it’s in your best interest to ensure builders risk coverage is in place and there are advantages to obtaining your own policy instead of relying on the project owner to secure coverage.

Builders risk protects you against unforeseen events which may have a financial impact on your project and company.


As a homeowner you may be required by a lender to obtain builders risk (sometimes called “Hazard”) insurance. Beyond that requirement it is simply a prudent idea to secure coverage for your home as it’s being built.

Most homeowners policies do not provide coverage for homes under construction leaving you exposed to potential losses with a builders risk policy.

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What's Covered?

Hard Costs

Covers buildings and structures under construction along with the materials, supplies, and equipment that is on site, in transit or at another location including labor costs from events such as:

  • Fire, Lightening, Hail
  • Explosions
  • Theft & Vandalism
  • Acts of God
Soft Costs

Otherwise known as delay in completion, these are the costs which are indirectly related with a delay in building being completed or its development, such as:

  • Lost sales
  • Rental income
  • Additional interest on loans
  • Real estate taxes
  • Equipment rental costs
Other Considerations
Optional Coverages

While there may be exclusions on a Builders Risk policy many coverages can be added on such as:

  • Flood
  • Debris removal
  • Existing buildings or structures
  • Mechanical testing & replacement
  • And many more

It’s common for a Builders Risk policy to have a number of exclusions. For example earthquake and flood are typically excluded from coverage but you may be able to obtain extensions for certain types of coverage to be added back on. Common exclusions include:

  • Wear and tear
  • Acts of terrorism and war
  • Mechanical breakdowns
  • Workmanship and materials
  • Rust and corrosion

Keep in Mind

Builders Risk policies can be complex, there are many options and considerations to take into account. It is important to work with an experienced agent. Every project carries unique risks and you will want a policy structured to address your needs.

Coverage is written on a per project or portfolio basis, so if you’re a builder working on multiple projects it may makes sense to obtain a master policy to cover your entire portfolio.