Builders risk is an insurance specialized for dangers that specific industries face. This insurance covers property under construction against incidents with fire, lightning, hail, theft, vandalism and other dangers. Property possibly covered beneath a builders risk policy includes the buildings or structures themselves, materials, supplies and equipment.

In general, anyone with stake in a construction project should carry or be listed on a builders risk insurance policy. This may include: 

The primary policy holders are generally contractors, business owners and homeowners. This insurance is crucial for protecting a project while it’s underway. Incomplete projects are at much more mercy to the elements, theft and vandalism than normal structures. The same goes for equipment that is possibly left overnight at the construction site. This insurance doubles as protection for everyone involved, as it provides compensation for lost or damaged items necessary to complete the project. 

Is Builders Risk Insurance Required? 

Construction contracts often come with a requirement for builders risk insurance. Replacing a half-constructed home or expensive equipment can be costly, and no one wants to pay for starting over out of pocket. The quicker that compensation can be provided to cover the damages or losses, the quicker the project can be resumed and finished. This is why most businesses will require their contractors or subcontractors to carry builders risk insurance. 

How Much is Builders Risk Insurance? 

The cost of builders risk insurance varies depending on several factors, including the aspects of the project being insured. Factors that affect builder’s risk insurance premiums are: