Builders Risk Insurance

Builders Risk, is a special type of property coverage that indemnifies buildings and property while under construction or renovation. 

A Builders Risk policy is coverage that protects the insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a structure or building should those items sustain physical damage, or loss, from a covered peril.

Buildings are subject to many different risks while under construction or renovation.  They may catch fire, be damaged by high winds or fall victim to other forces of nature.  Perils such as fire, wind theft vandalism and more are covered perils, while perils like earthquakes are not covered.  Some perils, such as the previously mentioned earthquakes, can be added to a Builders Risk Policy as an Endorsement.  These policies also do not cover work place accidents.

Who Can Obtain A Builders Risk Policy?

A Builders Risk Policy can be obtained by the owner of the property under construction and name themselves as beneficiary.  This makes the most sense when the property is already covered by another policy and goes under renovation.  This protects the homeowner’s interest in the renovation.  However, if the building is being constructed and the owner of the property has no current coverage, the builder can obtain the Builders Risk Policy to protect their interest in materials, fixtures and/or equipment.  A policy should be put in place prior to the delivery of materials and so forth.

Termination of the Builders Risk Policy

A Builders Risk Policy terminates in one of two ways – whichever comes earliest:  One, the closing of a sale or occupancy being restored to the property owner or two, the end of the term period.  A Builders Risk Policy is a necessity, whether you are the builder or property owner.  As stated before, this policy will protect your insurable interest in equipment, materials and/or fixtures being used in the construction or renovation of a property, in the event of a physical loss or damage caused by a covered peril.