What Is Builders Risk Insurance?
What Does Builders Risk Insurance Cover?
In a renovation, one sample builders risk form excludes the existing structure, so a policy on the new work alone can leave the older building unprotected. 2,4 The same form separates materials built into the project from the contractor's tools. 4
New Work and Existing Buildings
When you renovate, identify the new work and existing structure separately in the quote discussion. 2,4Materials and Contractor Tools
Ask whether the quote protects materials, fixtures and equipment intended for your building, and separate those from your contractor’s tools. 4| Project detail | Ask in the quote |
|---|---|
| New construction or added work | Which construction phases and project areas does the quote include? |
| Existing structure in a renovation | Does the quote address the existing building separately from the new work? |
| Materials and fixtures | Which materials and fixtures intended for the building are covered? |
| Contractor tools | Does the quote address tools used by the contractor, or do they need separate coverage? |
Who Needs Builders Risk Insurance?
You need it if you own the project or your contract makes you responsible for it. Agree with the owner and contractor on who buys the policy, so the project isn't insured twice or not at all. 5,2
Builders Risk Insurance Coverage Examples
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 Builders Risk Insurance Coverage and Costs?
Project Value and Changes
Discuss your completed project value, which costs it includes and how to report changes to the work. 5Limits and Deductibles
Compare your proposed limits and deductibles, including how the insurer calculates any percentage deductible. 4,5Jobsite, Storage and Transit
Your materials may wait in a supplier's warehouse, travel by truck and reach the jobsite before installation. Protection at the site doesn't carry over to storage or transit automatically, and limits can differ at each stage, so list every stage for your broker. 4
What Exclusions and Conditions Should You Check in Builders Risk Insurance?
Faulty Work and Resulting Damage
Ask how the quote treats faulty design, materials or workmanship, and damage that follows those problems. 4The sample form excludes defective work but can still respond to damage that follows it. Replacing the faulty work and repairing the damage it caused may be paid differently. 4
Completion and Occupancy
Ask when your construction coverage starts and ends, and how completion, acceptance or occupancy affects it. 4,5If you open part of the building while work continues, coverage can end for that part. Tell your broker about phased openings and schedule changes before they happen. 4,5
How Does Builders Risk Insurance Compare With Related Coverage?
Project Property and Liability
Review damage to your construction project separately from claims that someone was injured or their property was damaged. 1,3What Do You Need for Builders Risk Insurance Quotes?
Bring a project description, location, work completed so far and expected construction schedule to your quote discussion. 5,2A Project Brief for the Quote Discussion
| Prepare | Direct quote action |
|---|---|
| Project address and description | Describe what you are building or changing. |
| Existing structure and proposed additions | Ask whether the quote addresses the existing building and new work separately. |
| Work already completed and expected schedule | Give the target start, completion and occupancy dates. |
| Project value and the costs included | Ask which costs to include in your project-value estimate. |
| Material storage and delivery plans | List where materials will be stored and each transit stage. |
| Contractor tools you want considered | Separate contractor tools from materials intended for the building. |
Builders Risk Insurance: Key Terms in Plain English
Completed Project Value
The value of the finished project, used to set the amount insured. 5
Occupancy
Use of the building, which can end construction coverage even if other work remains. 4,5
Frequently Asked Questions About Builders Risk Insurance
Are Tools and Building Materials Treated the Same?
No. Windows awaiting installation and a contractor's drill may be insured differently, so check each. 4
When Does Builders Risk Coverage End?
What Project Value Should I Use for Builders Risk Insurance?
The completed value of the project. Ask which costs belong in it and how to report change orders so the amount insured keeps up. 5
More Builders Risk Insurance Questions
Does Builders Risk Cover An Existing Building?
California’s Commercial Insurance Guide describes builders risk for existing structures undergoing additions, alterations, or repairs.
Does Builders Risk Cover Architect Errors?
Usually not—the cited form excludes faulty design; professional liability may cover architect negligence, while resulting project damage depends on the builders risk wording.
Does Builders Risk Cover Business Interruption?
NAIC defines business interruption as lost income resulting from property damage to a business facility.
Does Builders Risk Cover Cleanup?
Builders risk may cover debris removal after covered damage, but routine cleanup and some pollution remediation are excluded under the cited form.
Does Builders Risk Cover Collapse?
Sometimes—builders risk may cover a collapse caused by an insured event, but the cited form excludes faulty design, workmanship, and settling; check its collapse definition and any resulting-damage exception.
Does Builders Risk Cover Commercial Buildings?
Yes, builders risk can cover a commercial building under construction or renovation.
Does Builders Risk Cover Commissioning?
Commissioning may be covered under a testing extension, but limits, breakdown exclusions, and startup procedures control coverage.
Does Builders Risk Cover Completed Work?
Builders risk may stop covering completed work at acceptance, occupancy, or another policy milestone.
Builders Risk Insurance Guides by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Which Insurance Providers Offer Builders Risk Insurance?
Sources for Builders Risk Insurance
- Glossary of Insurance Terms. National Association of Insurance Commissioners; Builders’ Risk Policies; Ocean Marine; Auto Physical Damage; All-Risk. Accessed 2026-09-16.
- 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.