Builders risk in Massachusetts

DCAMM's general conditions for public building construction require the contractor to buy builders risk or an installation floater, on an all-risk basis, for the contract price, and to keep it until final acceptance and final payment. Flood is in that list only if the project is not in an A or V flood zone, and the earthquake and flood limits are the lesser of the contract price or $10 million unless the contract sets a higher amount. A subcontract clause that makes a subcontractor indemnify another party for injury the subcontractor did not cause is void. ^1,²

What Is Builders Risk?

Builders risk protects the project you are building, including materials meant for it, against physical loss until construction ends. The gaps that cost owners money are materials in storage or transit, the existing building in a renovation, and coverage ending when you occupy early. Read the national Builders risk guide.

Massachusetts Requirements

Requirement	Details
DCAMM builders risk amount	Contract price, all-risk or equivalent, kept until final acceptance and final payment. ¹
Earthquake and flood sublimit	The lesser of the contract price or $10,000,000, unless the contract specifies otherwise. Flood is listed only if the site is not in an A or V zone. ¹

What to Watch for in Massachusetts

Flood Drops Out in an A or V Zone
The DCAMM builders risk clause lists flood only if the project is not in an A or V flood zone. Earthquake and flood limits, when those perils are in the form, are the lesser of the contract price or $10,000,000 unless Exhibit A or the contract says otherwise. If the parcel is in an A or V zone, ask for a separate flood placement. The standard sentence does not provide it. ¹
Work on an Existing Building Uses an Installation Floater
When work will be done on existing buildings the owner already owns, the contractor provides an installation floater for the full contract price, again on an all-risk basis, with the same earthquake and flood limit structure. New construction uses builders risk for all work in the contract. Tell the broker which one the project is. Off-site stored materials must be insured, and the contractor replaces any loss to those materials at no expense to the awarding authority. ¹
Name Every Tier, and Keep the Policy Through Final Payment
The policy must list the awarding authority, the owner, the contractor, and subcontractors of any tier as named insureds, and it must be payable to those interests as they appear. Coverage runs until final acceptance and final payment, not merely until the building is enclosed. The contractor adjusts a property loss as fiduciary and pays subcontractors their shares. Certificates are due when the contract is signed, must show builders risk as all-risk including earthquake and flood with the awarding authority as named insured or loss payee, and cancellation needs 30 days' written notice. The contractor pays the deductibles. ¹
The Second Requisition Waits on Proof the Premium Was Paid
DCAMM's billing instructions say the general contractor must submit proof that the bond and insurance have been paid before the second requisition on a state project can be processed. A binder that has not been paid can stall that invoice. Ask for the insurer's letter or the cancelled check the instructions accept. ³
A Subcontract Cannot Shift Someone Else's Negligence
Massachusetts General Laws chapter 149, section 29C voids a provision in a construction contract that requires a subcontractor to indemnify any party for injury to persons or damage to property not caused by the subcontractor or its employees, agents, or subcontractors. That limit is about the subcontract, not about whether builders risk covers the loss. Read the indemnity next to the waiver of subrogation the DCAMM property form requires in favor of the awarding authority and owner. ^2,¹
Permits After June 30, 2025 Use Only the 10th Edition
The 10th edition of the state building code, 780 CMR, took effect October 11, 2024. The 9th edition could be used concurrently only through June 30, 2025. Applications received on or after July 1, 2025 that rely on the 9th edition are not accepted. Match the builders risk values to the plans filed under the edition the permit actually uses. ⁴

Who Regulates Insurance in Massachusetts

Massachusetts Division of Insurance

The Massachusetts Division of Insurance licenses insurers and producers, reviews rates and forms, and handles insurance complaints. Use the State Based Systems lookup for producers, agencies, and surplus-lines brokers. For insurer status, use the DOI’s separate licensed or approved company lists, including the eligible surplus-lines company list. Before filing a complaint, contact the insurer or producer; if the response is unsatisfactory, submit the online form with supporting papers. The DOI says not to use the form for ongoing litigation. ^5,^6,^7,⁸

Surplus-lines tax and stamping office

Reported tax rate: 4% of gross premiums less gross return premiums on risks or exposures in Massachusetts or another state when Massachusetts is the insured’s home state. A diligent effort to place coverage with admitted insurers is generally required before surplus-lines placement through a specially licensed Massachusetts broker. The narrow §224 large-commercial exception is described in the note below. ^9,^10,^11,¹²

Multi-state surplus-lines tax dates and exceptions: For this rule, home state means the state of the insured’s principal place of business or, for an individual, principal residence; if 100% of the risk is outside that state, home state is where the greatest percentage of taxable premium for that insurance contract is allocated. For multi-state policies effective on or after August 10, 2018, the Division of Insurance says the 4% tax applies to gross premium regardless of whether risks are inside or outside Massachusetts when Massachusetts is the insured’s home state. For earlier effective dates, Massachusetts risk portions are taxed at 4%, while out-of-state portions are taxed at the rates for their allocated premium. The Division lists exceptions for policies issued to the Massachusetts Bay Transportation Authority, federal credit unions when they are the purchaser, and tribal lands on reservations. Brokers still make required filings for exempt policies. Tax-exempt status alone is not specifically excluded. ^9,¹⁰
Narrow large-commercial placement exception: Section 168(b)(iv) exempts the diligent-effort affidavit and excess-placement condition in §168(b)(iii) only for a §224 qualifying commercial risk or policyholder. The policyholder must acknowledge in writing that the insurer is not admitted and that the Massachusetts Insurers Insolvency Fund will not pay an insolvency loss. Section 224 eligibility is limited to a corporation, partnership, trust, sole proprietorship, or other business or public entity with at least $30,000 in aggregate property-and-casualty premiums, excluding workers’ compensation. The holder must certify its election and understanding of limited regulatory oversight and certify at least two criteria: net worth of $10 million; net revenue or sales of $5 million; more than 25 employees per individual company OR more than 50 employees per holding company aggregate; a nonprofit or public entity with annual budget or assets of $25 million or more; a municipality with population of 20,000 or more; or retention of a risk manager who is either a full-time employee or retained by the policyholder; that person must be licensed and hold one of these qualifications: certified insurance counselor, chartered property and casualty underwriter, associate in risk management, certified risk manager, or licensed insurance advisor in property and casualty. ^11,¹²

Providers With Documented State Licenses

No provider in Spot’s research documents both a state license record and this coverage line. This does not establish that providers are unlicensed. Check the regulator’s license lookup and confirm availability with a provider when requesting a quote.

Questions to Ask Before You Buy in Massachusetts

Is the parcel in an A or V flood zone, and if so where is flood covered?
Is this new work at the contract price, or an installation floater on an existing building?
Are the awarding authority, owner, contractor, and subcontractors of every tier named insureds through final payment?
What proof of paid premium will DCAMM accept before the second requisition?
Does any subcontract indemnity conflict with chapter 149, section 29C?