Builder’s risk insurance
Insure it while it rises.
Builder’s risk covers the work in progress and the materials on site while the job is built, ground-up or renovation. We place it for owners, developers and GCs.
Light RFP Risk Management Services LLC · NY DFS License # PC-1978982
In force before the first delivery.
Builder’s risk is written to the construction schedule, not a calendar year. It goes on before the first delivery and ends at the end trigger: whichever event the policy names, such as completion or occupancy, comes first. It is rated on the project’s completed value: the full cost to build it (labor, materials and the contractor’s fee), not the land or what the building will sell for.
| Row | Starts | Ends |
|---|---|---|
| Project value | Rises from the dig | Completed value, by the end trigger |
| Materials on site | The first delivery | Installed during the finish |
| Builder’s risk | Before the first delivery | The end trigger |
| Property policy | Bound before the end trigger | Carries on once the building is in use |
What it covers, and what it doesn’t.
Most builder’s risk is written all-risk: covered unless the policy excludes it. The exclusions matter more: many disputes come down to which policy should pay. This is the shape of the market; your policy’s own terms decide.
Typically covered
- Fire, lightning, wind and hail
- Theft of materials from the siteUsually. Some forms need a theft endorsement.
- Vandalism
- Vehicle impact and falling objects
- Collapse during constructionOn many forms, not all.
- Materials in transit or stored off siteOften to a smaller, separate limit.
Covered on most formsDepends on the form: check yours
Not covered, and what covers it
- Someone is hurt on the siteGeneral liability
- Your own employee is hurt at workWorkers’ compensation
- The contractor’s tools and equipmentTools & equipment insurance
- The cost to fix a design errorThe designer’s professional liabilityDamage the error causes to the work may still be covered.
- Flood or earthquakeStandalone flood, or an endorsementOften excluded, or included only to a smaller limit outside high-risk zones. Ask for both by name.
- The contractor can’t finish the jobA performance bond
- Anything after the end triggerThe permanent property policy
Who buys it? Whoever the contract says carries the loss.
Risk of loss is a contract term, not a job title: it names who bears the loss if the work is damaged before it’s finished. Settle it in writing before work starts, because owners and contractors routinely each assume the other bought it.
Owners and developers
Ground-up and most private development
You own the work in progress, so you carry the loss. Construction lenders usually require being named on the policy, as mortgagee or loss payee, before the loan funds.
General contractors
When the contract puts it on you
Public bid specs and many private contracts require the contractor to carry it and name the owner. Read the contract’s insurance requirements before you price the job.
Subcontractors
Almost never buy their own
You’re normally insured under the project policy, but check exactly how you’re named on it: the wording decides which of its coverages reach you. Insure your own tools and equipment separately.
Bidding out the job? Post the RFP on Light RFP for free, level the bids, and keep builder’s risk and the job’s bonds on the same project.
Before you apply.
Builder’s risk is rated mainly on the project’s completed value, so nobody can quote it without the budget. The application asks for these.
- The project’s address
- Ground-up or renovation, the start date and how long the job runs
- The completed value: on a renovation, the value of the work, and of the existing building if it needs cover
- Who is building it, and how long they’ve run work like it
- Who the policy names, and your lender if the loan requires it
Have the project budget to hand.
Questions before you buy.
Is builder’s risk the same as a performance bond?
No. Builder’s risk is insurance: the carrier pays if something accidental damages the work. A surety bond is a credit guarantee: the surety promises the owner the contractor will perform, and comes after the contractor to recover what it pays.
What a bond protectsDoes it cover a renovation?
Yes, but on a renovation it normally covers the new work and materials, not the building you already own, unless the policy is endorsed to include it. Keep the existing building insured under its own property policy, and tell that insurer about the work.
Can I insure a job that’s already started?
Often, with more questions about the work done so far and any losses. Some insurers won’t take a job already underway, so insure it before the first delivery if you can.
What if the job runs long?
Ask before the policy ends. Most policies can be extended for an added premium. If it lapses, the unfinished work is uninsured.
Who is insured on it?
Usually the owner, the general contractor and the subs, each for its own interest, with the lender named on the policy. The construction contract says who arranges it.
How is it priced?
Mainly off the completed value of the project: the full cost to build it (labor, materials and the contractor’s fee), not the land or what the building will sell for. Then construction type, location, the length of the schedule, the deductible and the site controls in place. Nobody can quote it without the project budget.
Does it cover flood and earthquake?
Often not. Many forms exclude both, or include them only to a smaller limit outside high-risk zones. Either can usually be added or raised by endorsement, with its own limit and deductible. Ask for both by name.
Insure the job before the first delivery.
Placed by Light RFP Risk Management Services LLC · NY DFS License # PC-1978982.
Light RFP earns a commission from the carrier on all policies.