Builders risk insurance is a specialized type of property insurance that is intended to provide protection for buildings and structures that are under construction. These policies protect project owners, general contractors and subcontractors against direct physical loss or damage to covered property.
In many instances, builders risk policies also provide coverage for materials and supplies that are on-site, in transit and being stored temporarily at off-site locations if they are intended to become a permanent part of a building or structure. What’s more, builders risk policies can be written to include coverage for loss of income and additional expenses. This coverage would apply if the completion of a project is delayed due to property damage caused by a covered cause of loss.
Builders risk coverage is a temporary form of insurance. Coverage applies only during the course of construction, erection and fabrication. In most cases, builders risk coverage stays in force until a construction project is accepted by the project owner or once construction is considered complete. Once construction is completed, it is up to the owner of the building or structure to secure traditional property insurance.
