Builders Risk vs. Contractor Insurance: What’s the Difference?

Builders risk covers project property; “contractor insurance” can mean several separate policies for liability, workers’ compensation, auto, or tools. A contractor package does not automatically insure the building materials or existing structure, so compare the policies by asset and claim type.

These coverages can overlap around a project without protecting the same thing. A specimen ISO builders risk form excludes contractor tools and equipment, so do not assume that insuring the building materials also protects the contractor’s own gear. General liability also does not serve as property insurance for the work under construction.

When comparing a contractor package with a builders risk proposal, list each exposed asset and claim type. Confirm which policy handles materials, the existing building, tools, rented equipment, employee injuries, vehicles, and third-party injury or property damage. Then compare deductibles and exclusions across the actual forms.