Whether you’re undertaking new construction, a remodel, or a renovation, a Builder’s Risk policy is an important consideration for residential and commercial properties. 

What is a Builder’s Risk Policy?

Designed to cover a property throughout the course of construction, a Builder’s Risk policy offers coverage on an open-peril basis and may include coverage for property at off-site storage locations or during transit. 

While Builder’s Risk policy coverage limits are often based on the total estimated completed value of the property, rates for new construction are usually less than completed building rates due to the smaller exposure in the early stages of a construction project.

Learn More: New Homeowner Checklist: Insurance Edition

Who needs this type of policy?

A Builder’s Risk policy is appropriate for any individual or company involved in a construction project, including: 

  • General contractors
  • Subcontractors
  • Property owners
  • Architects 

Explore the Policy: Commercial Property Insurance

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What’s typically covered by a Builder’s Risk Policy?

Due to the unique nature of different construction projects, a Builder’s Risk policy can be customized to fit a wide range of specific project needs. The core of every Builder’s Risk policy, however, is designed to protect structures under construction, and materials and equipment both on-site and during transit. Coverages include:  

  • Building materials and supplies which will become a permanent part of the building
  • Foundations and excavations
  • Scaffolding, construction forms, or temporary fencing
  • Equipment 
  • Transit
  • Soft costs 

Your policy may also include coverage extensions that protect against things like collapse, debris removal, and even fraud. 

What is “soft cost” coverage?  

An essential feature of a building policy is coverage for “soft costs.” Rather than being attributed to building materials or labor, soft cost expenses arise from a delay in completion due to loss from a covered peril. These may include additional advertising expenses, overtime, and fees for architects. Learn more about the difference between hard and soft costs here. 

Explore Your Builder’s Risk Options with Central

A Builder’s Risk policy provides a lot of protection for a small premium. Due to the specialized underwriting required for this exposure, it’s important to contact your Central agents before beginning any new or renovation exposure. 

Ready to get started? Find an agent to explore your coverage options and set your project up for success. 


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