When Do You Need Builders Risk Insurance?
You need builders risk before project materials or work are exposed if your existing property policy does not cover them.
The NAIC definition includes buildings under construction and related materials, but your own policy and contract determine who needs coverage. The NAIC glossary describes coverage for buildings in the course of construction and related equipment and materials, so the need usually follows the period when those project assets are exposed. Whether a separate policy is needed depends on existing insurance and the project contract.
Think about when the first materials arrive, when a contractor takes responsibility, and whether the structure will be vacant or partly occupied. A homeowners or commercial property policy may have conditions for building work; do not assume it automatically covers every project stage.
Before work begins, compare the existing policy with the proposed project coverage. Ask who is insured, which property and locations qualify, whether storage and transit are included, and how the term ends. Match the policy’s effective date to the first exposure and have the insurer confirm binding in writing.
