What Is a Builders Risk Policy? 

A builders risk policy is a type of insurance that covers a building during construction or a major renovation. It is sometimes called “course of construction” insurance and is usually carried by the owner, contractor or developer for the duration of the project.

What Does a Policy Cover?

While exact coverage may vary by carrier, a typical policy can cover the following:

• The building or addition being built or renovated, including temporary structures such as scaffolding, forms, falsework and fences

• Building materials and supplies such as lumber, steel, roofing, windows, doors and drywall

Depending on the policy form and endorsements, covered perils often include events like:

• Fire or explosion
• Lightning, windstorm and hail (sometimes with regional restrictions)
• Theft (often excluding employee theft, unless endorsed)
• Vandalism
• Vehicle or aircraft impact
• Collapse from certain causes
• Water damage from burst pipes (not flood, unless endorsed)

What Is Usually Not Covered?

While every policy is different, a builders risk policy may exclude the following:

• General liability exposures such as third-party bodily injuries or property damage
• Design, engineering or architectural errors
• Faulty workmanship
• Damage resulting from wear and tear
• Damage caused by earthquakes, floods, nuclear hazards and wars
• Contract penalties, delay damages or loss of use

Who Needs This Policy?

A builder’s risk policy is typically recommended for construction firms, general contractors and subcontractors. While Utah doesn’t legally require this policy, some lenders and property owners may ask for proof of coverage before construction starts.

How Much Does a Policy Cost?

The cost of a builder’s risk policy can depend on the following factors:

• Total project value
• Type, length and scope of construction
• Location
• Construction materials
• Claims history
• Coverage selection
• Policy structure

Our agents are committed to helping our clients in Saratoga Springs, UT find optimal builder’s risk coverage at a reasonable price. Contact Moore and Moore Insurance now for a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.