What Is Builders Risk Insurance?
Builders risk helps protect a construction project and its materials against covered property damage while work is underway.
What Does Builders Risk Insurance Cover?
New Work and Existing Buildings
For a renovation, identify both the work being added and the existing structure when discussing coverage. 2,4Materials and Contractor Tools
Ask which materials, fixtures and equipment intended for the building are covered, and distinguish them from the contractor’s tools. 4| Project detail | What to clarify in the quote |
|---|---|
| New construction or added work | Which parts of the project does the property description include? |
| Existing structure in a renovation | Is the existing building addressed separately from the work being added? |
| Materials and fixtures | Which items intended for the building are included? |
| Contractor tools | Where does the quote address equipment used to perform the work? |
Who Needs Builders Risk Insurance?
Consider builders risk when you're building or renovating property, and agree with the owner and contractor on whose policy covers the project. 5,2
Coverage Examples
These are examples, not coverage guarantees. Your policy terms and the facts of the claim determine what is covered.
What happened
Materials Are Damaged Before Delivery
Windows waiting in temporary storage are damaged before they reach your building site.
What happened
You Open Before Construction Ends
You open the finished part of a building while contractors continue working elsewhere.
How Do You Compare Coverage and Costs?
Project Value and Changes
Discuss the completed project value, what costs it includes and how changes to the work should be reported. 5Limits and Deductibles
Compare the proposed limits and deductibles, including how any percentage deductible would be calculated. 4,5Jobsite, Storage and Transit
Materials may spend time in a supplier's warehouse, on a delivery truck and at the jobsite before they're installed. Tell your broker about each stage. Protection at the site doesn't establish protection during storage or transport, and the limits may differ between locations. 4
What Exclusions and Conditions Should You Check?
Faulty Work and Resulting Damage
Ask how the quote treats faulty design, materials or workmanship and damage that follows those problems. 4The cost of fixing faulty work and the damage it causes can be treated differently. Ask your broker to explain both for the construction method you use. 4
Completion and Occupancy
Ask when coverage starts and ends, and how completion, acceptance or occupancy affects the construction policy. 4,5How Does It Compare With Related Coverage?
Project Property and Liability
Discuss damage to the construction project separately from liability for injuries to other people or damage to their property. 1,3What Do You Need for a Quote?
Prepare a project description, its location, the work already completed and the expected construction schedule for the quote discussion. 5,2A Project Brief for the Quote Discussion
| Prepare | How to use it |
|---|---|
| Project address and description | Explain what is being built or altered. |
| Existing structure and proposed additions | Ask how the quote treats each part of a renovation. |
| Work already completed and expected schedule | Discuss the proposed start, completion and occupancy milestones. |
| Project value and the costs included | Compare your estimate with the basis used in the quote. |
| Material storage and delivery plans | Check the jobsite, temporary-storage and transit provisions. |
| Contractor tools you want considered | Keep working equipment distinct from items intended for the building. |
Key Terms in Plain English
Completed Project Value
The value of the finished project used in the coverage discussion. Confirm which costs it includes and how changes are reported. 5
Occupancy
Use of the building, which can affect when construction coverage ends even if other work remains. 4,5
Frequently Asked Questions
Are Tools and Building Materials Treated the Same?
No. Materials intended to become part of the building and tools used to do the work need their own coverage checks. Windows awaiting installation and a contractor's drill may be insured differently. 4
When Does Builders Risk Coverage End?
What Project Value Should I Use for Builders Risk Insurance?
Discuss the completed project value and which costs belong in it. Ask how to report changes to the work so the amount insured can be reviewed as the project changes. 5
Which Insurance Providers Offer Builders risk?
Sources
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- Commercial Insurance Guide. California Department of Insurance; Commercial Property; Inland Marine; What Should I Expect from a Broker-Agent. Version: Form 700 Revised June 14, 2024. Accessed 2026-09-16.
- Small Business. National Association of Insurance Commissioners; FAQ: What’s a business owners policy?; What’s general liability insurance. Accessed 2026-09-16.
- Builders Risk Coverage Form. Insurance Services Office, Inc.; hosted by Touchpoint Markets; A.1–3 p.1; B.3.c p.11; C,D,E p.12. Version: IH 00 70 05 17; copyright 2017. Accessed 2026-09-16.
- Builders Risk Application Tip Sheet. US Assure; General policy application tips p.1; Remodeling tips p.2. Accessed 2026-09-16.
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