Builders risk insurance is a type of property insurance that covers a building while it’s under construction or renovation, along with the materials and equipment that will become part of it.
It protects the structure from things like fire, wind, theft, and vandalism during the months when the project isn’t finished and a permanent property policy hasn’t taken over yet.
A half finished structure sitting on a job site carries real exposure. One storm or one fire can wipe out months of work and materials before the build is anywhere near complete.
At April Jones Insurance, we compare builders risk policies from multiple carriers to match the coverage to your specific project, your budget, and your timeline. Start a quote today and we will help you get the right coverage in place before the first load of lumber arrives.
What Is Builders Risk Insurance?
Builders risk insurance covers buildings and structures during construction or renovation. You’ll sometimes hear it called course of construction coverage, but it’s the same idea either way.
It isn’t the same as general liability coverage. Liability handles bodily injury and damage you cause to other people, while builders risk protects the project itself from physical damage.
The policy exists for a specific window of time. Once the building is complete and occupied, a permanent property policy takes over.
What Does Builders Risk Insurance Cover?
Most builders risk policies cover direct physical damage to the structure and to the materials that will become part of it. That includes the building, construction materials, and equipment waiting to be installed.
Covered perils
The covered risks usually include fire, wind, hail, lightning, theft, vandalism, and certain other events. These are the perils most likely to interrupt a construction project and create a costly delay.
Materials in transit and off site
Coverage often extends beyond the job site itself. Many policies protect building materials while they’re in transit or stored at an off site location, as long as the policy is written to include them.
Soft costs
A policy can also cover soft costs. Those are the indirect expenses that pile up when a covered loss delays completion, like extra loan interest, lost rental income, and additional permit fees.
What Builders Risk Insurance Does Not Cover
Knowing the limits matters just as much as knowing the coverage. Builders risk insurance is not a catch all, and a few common gaps surprise property owners every year.
Most policies exclude damage from faulty workmanship, normal wear, and mechanical breakdown. They also typically leave out tools and machinery owned by trade contractors, since those belong on a contractor’s own policy.
Flood insurance and earthquake are frequently excluded from the base form as well. In a state with real coastal exposure and mapped flood zones, that is an important detail to confirm before work begins.
Who Needs Builders Risk Coverage?
Anyone with a financial interest in a project under construction can benefit from this coverage. That often means more than one party on the same job.
A property owner financing a custom home needs it to protect their investment. A general contractor managing the site usually needs it to satisfy the construction loan and the contract terms.
Lenders almost always require builders risk insurance before they release construction loan funds. They want to know their stake in the building is protected if something goes wrong before the work is done.
If you are a developer, an investor, or a homeowner acting as your own builder, this coverage belongs on your radar too. The party who would absorb the loss is the party who needs the policy.
New Construction, Renovation, and Remodeling
Builders risk coverage is not just for ground up new construction. It applies to renovation and remodeling projects on an existing structure as well.
For a renovation project, the policy can cover both the new work and, in many cases, the existing building you are improving. The right structure depends on the project type, the construction type, and the value at stake.
Larger or repeat builders sometimes use a blanket installation policy or a reporting form policy to cover multiple jobs under one contract. These options can simplify coverage for contractors who always have several sites going at once.
Whether you’re handling a single remodel or a portfolio of builds, the policy should fit the way you actually work. We’ll help you sort out which approach makes sense for your situation.
How Much Does Builders Risk Insurance Cost?
The honest answer is that builder’s risk insurance cost varies from project to project. Premiums are usually figured as a small percentage of the total completed value of the structure.
Several factors determine the price. Insurance providers look at the construction type, the project size, the location, the length of the build, and the materials being used.
A simple residential remodel will cost far less to insure than a large commercial property going up from scratch. Projects greater in value and complexity carry higher premiums because they carry more risk.
Because we work with many carriers, we can compare the insurance cost across multiple insurance providers rather than settling for the first number you are quoted. That is how we find competitive pricing without trimming the coverage you actually need.
How Long Does a Builders Risk Policy Last?
A builders risk policy is built for the duration of the project, not for a permanent term. Most policies run for a set period, often three, six, or twelve months, tied to your construction schedule.
If the work runs long, the policy can usually be extended so coverage does not lapse mid build. The moment the structure is finished and occupied, builders risk coverage ends.
At that point you move to a standard commercial property or homeowners policy for the completed building. We can line up that transition in advance so there is never a gap between the two.
Why Work With April Jones Insurance
As an independent agency, we are not tied to a single carrier or a single way of writing a policy. We shop the market and build coverage around your project rather than forcing your project into one company’s box.
We write personal and commercial insurance across North Carolina, and we understand the local risks that come with building here. That knowledge helps us spot the gaps a generic policy might leave behind.
When a claim happens, you reach real people who know you and your project details, not a 1-800 number. We stay with you from the first quote through the final payout.
If you are getting ready to break ground or start a remodel, let’s get your coverage squared away first. Start a quote with our team and we will help you secure coverage for your build from the ground up.
Builders and Homeowners Also Ask These Questions About Builders Risk
What does builder’s risk insurance cover?
Builder’s risk insurance covers direct physical damage to a structure under construction, along with the construction materials and equipment that will become part of it. Most policies protect against risks like fire, wind, theft, and vandalism, and many can be extended to cover soft costs, debris removal, and materials in transit or stored off site.
Who pays for builders risk insurance?
The party with the financial interest in the project typically pays for the policy, which is often the property owner or the general contractor. The contract and the construction loan usually spell out who is responsible, since lenders want the coverage in place before they fund the build.
Is builders risk the same as general liability?
No, they cover different things. Builders risk insurance protects the building and materials from physical damage, while general liability coverage handles bodily injury and property damage you cause to other people during the work. Most construction projects need both.
Does builders risk insurance cover renovations?
Yes, builders risk coverage applies to renovation and remodeling projects, not just new construction. A policy can be written to cover the new work and, in many cases, the existing structure you are improving, depending on the scope and value of the project.
How long does builders risk coverage last?
A builders risk policy lasts for the length of the construction project, commonly three, six, or twelve months, and can usually be extended if the work runs long. Coverage ends once the building is completed and occupied, at which point a permanent property policy takes over.