What Does Builder’s Risk Insurance Cover?

Builder’s Risk insurance policies are not created equal, with a wide variance in the scope of coverage available in policies on the market today. It’s important to ensure that each of the insureds covered in the policy understands what is and isn’t covered and what supplemental coverages and extensions are available to address certain exposures that might not be included in a typical or basic form.

A Builder’s Risk policy may be written to cover the whole structure for new construction or the cost of remodeling and renovation projects. Insurance can also be used to cover specific projects, such as a new room addition, a deck, or a remodeled kitchen (betterments). A typical Builder’s Risk insurance policy protects against fire, lightning, hail, wind, theft, and vandalism, among other perils. In addition to physical damage or loss, a policy can be designed to reimburse an insured for taking protective measures as a result of the damage, such as debris removal and pollutant cleanup.

Coverage applies to the following property:

• Existing Structures
• New Construction
• Foundations and Underground Property
• Other Property: scaffolding, temporary buildings or structures, fencing, antennas, and materials either stored outdoors or stored outside of a pre-designated distance from the project
• Building Materials
• Off-site Property/Materials in Transit

Additional coverages are available as policy extensions and endorsements. Some policies may include some of these coverages automatically along with sublimits, while other endorsements must be purchased, depending on the insurer’s form. These include:

• Soft Costs
• Limited Fungus
• Expediting Expenses 
• Expenses to Re-erect Scaffolding 
• Ordinance or Law Personal Property 
• Rewards
• Temporary Storage Location 
• Sewer Backup 
• Transit 
• Blueprints and Construction Documents 
• Trees, Shrubs, and Plants – located at the covered job site and being planted or installed as part of the construction project

What’s Not Covered in a Builder’s Risk Policy?

Builder’s Risk insurance is typically written on an “all-risk” basis with certain exclusions. Typical exclusions include intentional damage, ordinary wear and tear, manufacturing defects or flaws in workmanship or design, acts of terrorism, nuclear risks, war or military action, and even some acts of nature.

Need more Builder’s Risk information? Download our FREE Builder’s Risk guide here where we discuss current trends, underlying cost factors, and more.

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Real Estate, Community Associations, Hotels, and Restaurants. Property and liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished Programs’ high-limit umbrella programs remain the clear choice in its areas of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

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