Does a Developer Need Builders Risk Insurance?

A developer’s exposure can include the building while it is being constructed and the materials committed to the job. The NAIC identifies builders risk as coverage for buildings during construction, with certain construction machinery, equipment, and materials also within its general description. That does not determine which developer or project qualifies under a particular insurer’s form.

The project may involve a landowner, development entity, lender, construction manager, and general contractor. In the specimen ISO form, the declarations identify the named insured, and the covered project is described there. An entity related to the named insured should not assume it is covered without being scheduled or otherwise included under the policy wording.

Bring the entity chart, construction agreement, lender requirements, budget, schedule, and project location to the quote discussion. Compare how the form values construction in progress, whether the existing structure is included, and how coverage transitions after completion, occupancy, sale, or purchaser acceptance.