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Builders Risk Insurance

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Builders Risk Insurance

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Builder’s Risk Insurance—also called Course of Construction Insurance—is a specialized property policy that protects buildings and structures during construction or renovation. Unlike your general liability policy (which covers your work), Builder’s Risk protects the project itself: the building, materials, and equipment from fire, theft, vandalism, and other perils.

The “Risk Reality”: Your Biggest Investment is Unprotected

A construction project represents a massive investment at its most vulnerable. The structure isn’t yet complete—there are no locks, no alarm systems, no fire suppression. A fire, storm, or theft can destroy months of work and materials in minutes. According to the National Fire Protection Association, construction sites are at elevated risk for fire due to exposed materials, hot work, and open structures. Standard property insurance doesn’t cover buildings under construction—you need Builder’s Risk.

Who Needs Builder’s Risk Insurance?

Responsibility for purchasing Builder’s Risk depends on the construction contract and project type. The policy should name all parties with a financial stake in the project to avoid disputes after a loss.Select your role below to understand your coverage needs.

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Property Owners

You have the largest financial stake—protect your investment from day one.

  • The Risk: A fire destroys your half-built dream home, and you still owe the bank.
  • The Fix: Owner-purchased Builder's Risk covering the full project value plus materials.
  • Best For: Homeowners building custom homes, commercial property developers.
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General Contractors

Contracts often require GCs to provide Builder's Risk—especially on renovations.

  • The Risk: The contract requires YOU to provide coverage, but you didn't—now you're liable.
  • The Fix: Contractor-purchased Builder's Risk with the owner named as additional insured.
  • Best For: Renovation projects, tenant build-outs, spec homes.
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Lenders & Developers

Banks require Builder's Risk to protect their construction loan collateral.

  • The Risk: The project burns down mid-construction—who pays off the loan?
  • The Fix: Builder's Risk with Lender's Loss Payable endorsement protecting bank interests.
  • Best For: Construction lenders, multi-family developers, commercial investors.

Builder's Risk Insurance Coverage

We design Builder's Risk Insurance policies that protect your project from groundbreaking to ribbon cutting, covering the structure, materials, and soft costs.
What is Covered
Structure Under Construction: The building or structure itself as it's being built, including foundations, framing, and permanent fixtures.
Materials & Supplies: Building materials at the job site, at temporary storage locations, or in transit to the construction site.
Temporary Structures: Scaffolding, temporary fencing, construction trailers, and other temporary structures needed during construction.
Soft Costs: Additional loan interest, taxes, lost rental income, and other indirect costs caused by covered construction delays.
What is NOT Covered (Exclusions)
Flood & Earthquake: These perils are typically excluded and require separate endorsements—especially important in coastal or seismic zones.
Faulty Workmanship: Damage resulting from poor construction quality is excluded. Builder's Risk covers perils, not defects.
Contractor's Tools & Equipment: Your tools and machinery need a separate Construction Insurance (Inland Marine) policy.
Bodily Injury Liability: Builder's Risk is property coverage only. Liability requires a separate General Liability policy.

Covered Perils vs. Common Exclusions

Understanding what's covered—and what's not—helps you avoid gaps in protection.
✓ Typically Covered Perils ⚠ Common Exclusions
✔ Fire and smoke damage ✖ Flood (separate policy available)
✔ Wind and hail ✖ Earthquake (endorsement available)
✔ Theft and vandalism ✖ Faulty workmanship or design
✔ Lightning strikes ✖ Mechanical breakdown
✔ Explosions ✖ Employee theft
✔ Vehicle collision damage ✖ Normal wear and deterioration
   

Builder's Risk vs. Construction Insurance

These two coverages serve different purposes—most projects require BOTH for complete protection.
Feature Builder's Risk Insurance Construction Insurance
Primary Purpose Specific construction project Ongoing business operations
Duration Project duration only (3-12 months) Annual, renewable policy
What It Covers Building structure & materials Liability, workers, vehicles, equipment
Who Purchases Property owner or contractor Contractor (required)
Covers Building During Construction ✔ Yes ✖ No
Covers Third-Party Injuries ✖ No ✔ Yes
Need ongoing business protection? Learn about Construction Insurance →

Builder's Risk Insurance Cost

"How much does Builder's Risk cost?" Premiums are based on project value, construction type, and location.
  • Premium Estimates: Builder's Risk typically costs 1% to 4% of total project value. A $500,000 residential project might run $2,500-$10,000 for the policy term. Commercial projects with higher risk factors may be more.
  • Cost Factors: Construction type (frame vs. fire-resistive), project location, coverage limits, deductible amount, and project duration all impact premium.

The "Independent Difference": Why Dream Assurance?

Captive agents only have one price. "Independent Means Multiple Choices." We shop 30+ top-rated carriers to find the best rate for your specific project.
  • Specialty Markets: From single-family home builds to multi-million dollar commercial developments, we have a market for every project size.
  • Bundling with GL: We can often package Builder's Risk with your General Liability and Workers' Comp for streamlined coverage and potential discounts.
  • Claims Advocacy: We don't work for the insurance company; we work for you. Our team guides you through the claims process to ensure fair payouts.

Coverage Guidance That Meets You Where You Are

Headquartered in Overland Park, KS and serving clients across multiple states, our team provides straightforward guidance to help you make informed insurance decisions.

If you’re comparing insurance options or reassessing your current coverage, we’ll help you evaluate what you have, identify potential gaps, and find a path forward that makes sense for your situation.

Licensed In 18 States

Headquartered in Overland Park, KS, with licensed support across the Midwest, South, Northeast, and West.

  • KS, IL, MO, KY, TN, AL, GA, TX, MI
  • WI, IN, NV, PA, OH , OK, MD, IA, & MN

Hover, tap, or click a licensed state to see where we can help with coverage.

TALK WITH OUR TEAM

Meet the people who make coverage guidance feel clearer, faster, and more personal.

Use the arrows or swipe to browse the team.

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Experience the confidence shared by the contractors and developers we protect, and let us turn these options into a clear, comprehensive protection plan for your project.

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Frequently Asked Questions

What does Builder’s Risk Insurance cover?
Builder’s Risk Insurance covers the structure being built, building materials, fixtures, and equipment at the construction site. It typically protects against fire, wind, theft, vandalism, lightning, and explosions. Coverage can extend to materials in transit and stored off-site, as well as temporary structures like scaffolding.
Either the property owner or the general contractor can purchase Builder’s Risk Insurance. The responsibility is typically outlined in the construction contract. Owners often purchase it for new construction where they have the largest investment, while contractors may purchase it for renovation projects or when contractually required.
Builder’s Risk policies are project-specific and typically last 3-12 months, depending on the expected construction timeline. Coverage ends when the project is complete, the building is occupied, the policy expires, or permanent property insurance takes effect—whichever comes first. Extensions are available if construction is delayed.
No. Builder’s Risk is project-specific property insurance that covers the building being constructed. Contractor’s (Construction) Insurance covers the contractor’s ongoing business operations—liability, workers’ compensation, commercial auto, and equipment. Most construction projects require both types of coverage for complete protection.
Builder’s Risk premiums typically range from 1% to 4% of the total project value, depending on the construction type, location, coverage limits, deductible, and project duration. A $500,000 residential project might cost $2,500-$10,000 for the policy term, while commercial projects with higher risk factors may be higher.
Builder’s Risk covers damage to the project itself, regardless of who causes it. However, it does not cover subcontractors’ liability or their tools and equipment. Subcontractors need their own liability insurance. If a subcontractor damages the project, the Builder’s Risk policy would pay for repairs, potentially with subrogation against the responsible party.

Builder's Risk Insurance

See what coverage may also matter for your project.

Builder's risk covers the job itself, but it is often only part of the picture. These related options can help you compare liability, employee protection, and broader construction coverage.

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Related Coverage Options

General Liability Insurance Covers third-party injury, property damage, and legal claims that builder's risk does not handle. Workers' Compensation Insurance Helps cover medical costs, lost wages, and employer liability when an employee is injured on the job. Construction Insurance A broader construction package that can combine liability, workers' compensation, commercial auto, and equipment coverage for your business.

Builder's Risk Guide

Builder's Risk Insurance Explained A clear overview of what builder's risk insurance covers, who may need it, and what can affect the cost.

Need help?

If you want help reviewing the project, contract requirements, or coverage options, our independent agents are ready to help.

Call 618-657-7525
Email info@dreamassurance.com
Office 9200 Indian Creek Parkway, Suite 100, Overland Park, KS 66210

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