The general contractor is most often the party that procures builders risk on the full project value and names the owner, the lender, and the subcontractors as insureds. When the owner buys it instead, the GC still needs to confirm the completed value, the soft-cost and theft sublimits, and that its own interest is named before the first draw releases.
Builders risk insurance for contractors
Pays to repair or rebuild the project your crews are working on, plus the materials and fixtures going into it, when a covered peril such as fire, wind, or theft damages the work before the building is finished.
Why Coverwatch
- Markets
- Carriers that will write ground-up, renovation, and frame construction, including the hard-to-place wood-frame builds a standard property agent surcharges or turns away.
- Competition
- 60+ markets put head to head on completed-value versus reporting-form terms, the soft-cost and theft sublimits, and the policy term and extensions, not just the premium.
- Certificates
- We get the owner and the construction lender named and issue certificates fast, so a draw or a subcontract never stalls on evidence of insurance.
For contractor
- What it covers
- Physical damage to the structure, materials, and fixtures while the project is being built.
- What it doesn't
- Injury to third parties on the jobsite, and the cost to redo faulty work.
Trusted by 60+ carrier partners
What does builders risk insurance cover for a contractor?
Builders risk insurance covers the structure your crews are building, plus the materials, fixtures, and supplies going into it, against fire, wind, theft, vandalism, and other covered perils while the project is under construction. It includes materials in transit and in temporary storage, and it ends when the project is completed or occupied.
Why a contractor carries builders risk on the project itself
Builders risk answers for physical damage to the work in progress, the structure and everything going into it, from groundbreaking until the project is finished.
The project is uninsured until it is finished
A standard property policy will not pay for a fire on a half-built structure, and the owner's building coverage does not attach until occupancy.
A delay costs money after the fire is out
When a covered loss pushes the schedule back, the loan keeps accruing interest, permits expire, and rents the finished building would have earned are lost.
Who buys it depends on the contract
On many jobs the owner procures builders risk and names the general contractor and subs as insureds.
How we get you covered
We take builder’s risk for contractor to 60+ markets, build it to fit your contracts, and keep your certificates compliant.
Read your risk
We map what could actually go wrong in your operation, where a claim would come from, and who would bring it.
Shop 60+ markets
We take your risk to the carriers that know your class and make them compete on price and terms.
Build the endorsements
We add the endorsement wording that decides whether the policy responds to a claim, beyond the base form.
Keep you compliant
We handle the COIs, additional-insured certs, and renewals, so you are never the one chasing paperwork.
Get a quoteFlat fee, no markup on your premium.
What's covered, and what isn't
In the policy
The structure under construction
The building your crews are putting up, its foundations, framing, and the systems installed so far, against fire, wind, and other covered perils.
Materials, fixtures, and supplies on site
Lumber, wiring, HVAC units, plumbing, and other materials that will become a permanent part of the completed structure.
Materials in transit and in temporary storage
Materials bought for the project but not yet on site, sitting at a supplier's yard, a temporary storage location, or on a truck in transit.
Soft costs and delay in completion
When a covered loss pushes the finish date back, this extension reimburses the financial fallout of the delay, including extended construction loan interest.
Theft of building materials
Copper wiring, appliances, lumber, and HVAC units staged or installed on an open jobsite are the most stolen items in construction.
Debris removal after a covered loss
After a fire, storm, or collapse damages the work, the site has to be cleared before the crew can rebuild.
Not in the policy
Injury to third parties on the jobsite
A visitor, a delivery driver, or a neighbor hurt on the site, or damage your crew causes to an adjacent property, is a third-party liability claim.
Covered by General Liability
The contractor's own tools and equipment
Hand tools, power tools, scaffolding, and your mobile equipment are not part of the structure being built, so builders risk does not cover them.
Covered by Inland Marine
The guarantee that you finish the job
If you default and fail to complete the work, the loss of the owner's completion guarantee is not property damage.
Covered by Surety Bonds
Injury to your own crew
A worker hurt on the job is a workers compensation claim, statutorily excluded from a property policy.
Covered by Workers Compensation
Faulty workmanship and the cost to redo it
The cost to correct defective work or a design error is excluded on most forms, because the policy insures against sudden covered perils.
Covered by a LEG-3 endorsement, otherwise the contractor
The finished and occupied building
Once the project is complete or the owner takes occupancy, builders risk terminates and the exposure becomes a standard property risk.
Covered by Commercial Property
Get a quoteGet a policy built for contractor.
Claims builder’s risk pays
The same jobsite produces very different losses. These are the first-party property claims a contractor actually files on a project under construction, with the typical cost to repair, rebuild, or absorb each.
ScenarioHow the claim happensTypical cost
Fire destroys a framed structure mid-build
A fire breaks out on a wood-framed building partway through construction and destroys the framing, sheathing, and installed systems.
$250K-$5M+
Wind damages an open-frame project
A storm tears through before the structure is dried in, and the wind damages the walls, the partially built roof, and the materials staged below.
$100K-$2M
Theft of copper and appliances from the site
Thieves enter an open structure overnight and strip copper wiring, plumbing, and appliances, often cutting into finished work to reach them.
$25K-$500K
Water damage from a burst line before drywall
A supply line or a plumbing rough-in fails and water runs through the structure before the drywall goes up, soaking framing, subfloor, and installed materials.
$50K-$750K
Delay pushes the project past the loan term
A covered fire sets completion back six months.
$50K-$1M+
Ranges are typical repair, rebuild, and delay bands for these claim types, not a quote. Actual exposure depends on the completed value, construction type, project duration, and the limit and sublimits you carry.
Get a quoteGet covered before a claim lands.
What contractor buyers are required to carry
The limits contracts and statutes set for this line, and what moves your premium and terms.
What buyers require
- Construction contract (owner)
- Full completed value
- AIA A201 General Conditions
- Full insurable value
- Construction lender
- Full completed value
The prime construction contract typically requires builders risk on the full insurable value of the work, on a replacement-cost basis, for the duration of construction, with the owner and general contractor named as insureds.
Under the standard AIA A201, the owner is obligated to purchase and maintain builders risk on the project at the full insurable value, naming the owner, contractor, subcontractors, and sub-subcontractors as insureds. The owner may decline in writing before construction, after which the contractor buys it and charges the cost back.
Most construction loans will not release funding until a builders risk certificate insures the project to its completed value and names the bank as loss payee or mortgagee on the property policy.
What sets your cost and terms
- The completed value of the project
- Premium tracks the full hard cost to finish the build, because that is the most the policy could pay for a total loss.
- Construction type and frame class
- Wood-frame construction rates the highest, because a single fire on an open frame can produce a total loss.
- Project duration and location
- A longer schedule means more months exposed to fire, storm, and theft, and a coastal or high-wind location adds catastrophe load.
- Security and theft controls on site
- Fencing, lighting, cameras, and a locked material-storage plan reduce the theft and vandalism exposure a carrier prices for.
How this changes by contractor segment
The policy is the same product; the exposure, the limit, and the exclusions to watch shift by segment.
An open roof is the build's biggest wind and water exposure, and a re-roof or tear-off leaves the structure and everything below it exposed until it is dried in. The date the roof is closed drives the whole claim picture, so the wind and water deductibles and the dried-in schedule matter more here than on most trades.
Water damage from an open system before the drywall goes up is a frequent builders risk loss, and a failed rough-in can run water through the framing and subfloor of a whole floor. Installed fixtures and copper also draw thieves, so the theft sublimit and the water-damage deductible both bear on plumbing work in the course of construction.
Endorsements that close the gaps
The base form is the start. These add-ons are where the policy gets built to fit contractor.
Soft costs and delay in completion
Adds coverage for the financial fallout of a covered loss that pushes back completion, including extended construction loan interest, re-permitting.
Theft of materials
Confirms theft of building materials and installed fixtures is a covered peril and sets the sublimit for it.
Named insured, owner and lender or mortgagee
Adds the project owner and the construction lender to the policy so each receives loss payment and accepts the certificate before releasing a draw.
Ordinance or law
CP 04 05Pays the extra cost to rebuild damaged work to current building codes after a covered loss, which a base form measures only against the original plans.
Permission to occupy
Lets the owner take partial or early occupancy of part of the project without voiding coverage on the rest of the work still under construction.
By the numbers
The loss data, form mechanics, contract floors, and premium ranges that surface when a contractor gets a project underwritten for builders risk.
- Fires in structures under construction per year
- 3,840 fires
- Construction equipment and materials theft per year
- $300M-$1B
- Base form behind builders risk
- ISO CP 00 20
- Who the owner must name under AIA A201
- Owner, GC, subs, sub-subs
- Typical builders risk premium
- 1%-4% of project value
- When coverage terminates
- Completion or up to 90 days post-occupancy
U.S. fire departments responded to an average of 3,840 fires in structures under construction each year, causing about 304 million dollars in direct property damage annually. Fire on a framed structure is the signature builders risk loss.
The NER and NICB estimate construction equipment and materials theft costs the industry 300 million to 1 billion dollars a year, with more than 11,000 incidents reported and only about 20 percent of stolen property ever recovered. Copper is among the most targeted.
The standard builders risk coverage form insures direct physical loss to a structure under construction, its foundations, and the materials, supplies, and equipment that will become a permanent part of it, on or within 100 feet of the premises.
Under the AIA A201 general conditions, the owner procures builders risk at the full insurable value on a replacement-cost basis and names the owner, contractor, subcontractors, and sub-subcontractors as insureds. The owner may decline in writing, after which the contractor carries it and charges the cost back.
Builders risk premiums generally run 1 to 4 percent of the total completed value of the project, so a 500,000 dollar build commonly costs 5,000 to 20,000 dollars to insure for the construction period.
Builders risk forms end coverage when the project is accepted, the certificate of occupancy issues, or the building is occupied and put to its intended use, with some forms allowing up to 60 to 90 days after occupancy before coverage lapses.
Common questions
about builder’s risk for contractor insurance
Builders risk covers the project your crews are building against sudden covered perils while it is under construction. That means the structure itself, its foundations and framing, and the materials, fixtures, and supplies that will become a permanent part of the finished building, whether they are installed, staged on site, in transit, or at a temporary storage location. Fire, wind, hail, theft, and vandalism are the core perils. The policy pays to clear the debris and rebuild the damaged work in place. It does not cover injury to third parties on the site, your own tools and equipment, the cost to redo faulty work, or the finished building once it is occupied, which sit in the general liability, inland marine, and commercial property lines instead.
Either can, and the construction contract decides. Under the standard AIA A201 general conditions the owner is responsible for purchasing and maintaining builders risk at the full insurable value, and the policy names the owner, the general contractor, the subcontractors, and the sub-subcontractors as insureds. The owner can decline in writing before construction begins, and then the contractor buys the policy and charges the cost back. What matters most is that every party with a stake is named: the owner, the GC, the lender, and the key subs. An unnamed party has no claim if the project burns, so Coverwatch reads the prime contract and the loan agreement before placing the policy.
Yes, up to a sublimit, and theft is one of the most common claims a contractor files. Copper wiring, appliances, lumber, and HVAC units staged or installed on an open site are the most stolen items in construction, and the policy pays to replace them and to repair the damage thieves cause cutting into finished work to reach them. The catch is the theft sublimit, which is a fraction of the policy limit and often comes with site-security conditions such as fencing, lighting, or a locked storage plan. Read the sublimit and the security requirements before a loss, because a large staged material buy can exceed the sublimit and a security lapse can jeopardize the claim.
No. Builders risk covers the materials and fixtures that become a permanent part of the structure you are building, not your movable tools and equipment. Hand tools, power tools, scaffolding, ladders, and mobile equipment travel from job to job and are not part of any one project, so they are excluded from the builders risk policy on the structure. Those items belong on an inland marine floater, often called a contractor's equipment or tool floater, which follows the gear wherever the crew takes it. The line to remember is simple: builders risk covers what becomes the building, and inland marine covers what you bring to build it.
Builders risk is a temporary policy tied to the construction timeline. Coverage generally begins at groundbreaking or when materials arrive, and it ends at the earliest of several triggers: the project is complete, the owner accepts and takes possession, the certificate of occupancy issues, or the building is occupied or put to its intended use. Some forms allow a grace period, often 60 to 90 days after occupancy, before coverage lapses. Once it ends, the finished building needs a standard commercial property policy from the first day of occupancy. If the owner wants to take partial occupancy while the rest is still being built, a permission-to-occupy endorsement keeps coverage on the unfinished work.
The limit is set to the completed value of the project, the full hard cost of materials and labor to finish it, not the value of the work done so far. Builders risk is a coinsurance form, so if you insure to less than the completed value, a partial loss is paid at a penalty proportional to the shortfall. On long or material-heavy projects where costs escalate mid-build, a reporting form lets you adjust the insured value as the project grows rather than fixing it at the start. Set the limit to the full budget, then revisit it if material prices spike before the structure is dried in, because underinsuring the completed value is the most common and most expensive mistake on a builders risk claim.
Builders risk premiums generally run about 1 to 4 percent of the total completed value of the project, so a project budgeted at 500,000 dollars commonly costs 5,000 to 20,000 dollars to insure for the construction period. The completed value is the primary driver, followed by the construction type, since a wood-frame build rates higher than masonry or steel because a single fire can produce a total loss. Project duration, location and catastrophe exposure, and the site-security controls you have in place round out the rate. A documented security plan and a shorter, well-managed schedule are the levers a contractor can actually pull to hold the premium down.
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