Builder’s Risk Coverage
Builder's Risk Coverage is a specialized insurance policy that protects a construction project during the building phase, covering damage or loss to materials, fixtures, and structures under construction from perils like fire, theft, vandalism, windstorm, and hail. It safeguards the project against unexpected events until construction is complete, it's often referred to as a course of construction insurance and typically covers the full value of the completed project.
Key points about Builder's Risk Coverage:
What it covers:
Building materials, temporary structures like scaffolding, storage containers, and even costs associated with debris removal and restoring construction progress.
When it's needed:
During the entire construction period of a new building or major renovation project.
Typical perils covered:
Fire, lightning, windstorm, hail, theft, vandalism, collapse.
Policy limit:
Usually set at the total estimated value of the completed construction project.
Important considerations:
Coverage may include "materials in transit" protection for items being delivered to the construction site.
Policies usually have exclusions for damage caused by faulty workmanship or design flaws.
The coverage ends when the project is considered substantially complete and the owner takes possession.