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Builders Risk
Insurance

We offer flexible payment plans to fit any budget needs.

We offer flexible payment plans to fit any budget needs.

We've helped over 60,000 customers buy more affordable insurance coverage.

We've helped over 60,000 customers buy more affordable insurance coverage.

We shop your coverage with up to 35 national carriers.

We shop your coverage with up to 35 national carriers.

We shop your personal insurance to save you time and money.

What is Builders Risk Insurance?

Builders risk insurance, also known in some areas as course of construction insurance, is a type of property insurance which covers a building where the structure itself, or insured area within, is presently under development, renovation or construction. Builders risk coverage can include protection for construction materials, heating and air-conditioning equipment, labor costs and expenses as well as temporary structures such as cribbing, false work, fencing, scaffolding, construction signs and even trees and other plants. While this type of insurance is not mandated by law, it is generally required for contractors/sub-contractors by their clients. Builders risk insurance is typically purchased for three, six, or twelve months, depending on the projected life of the construction. Most policies can be extended fairly easily at least one time, however additional extensions may be more difficult to obtain. It is best to advise your agent at the time the policy is purchased if you believe the project will run more than 12 months so they can negotiate renewal options based on a realistic view of the time necessary to complete the project.

A builders risk policy will typically provide coverage for damage done to the insured structure due to a variety of events, such as the following:

  • Fire.
  • Wind (depending on your geographic location).
  • Theft.
  • Lighting.
  • Hail.
  • Explosion.
  • Vandalism.
  • vehicles / Aircraft.

There are also exclusions to every policy, varying from carrier to carrier and geographic region. Some exclusions include:

  • Earthquake.
  • Employee theft.
  • Water damage.
  • Weather damage to property in the open.
  • War.
  • Government action.
  • Contract penalty.
  • Voluntary parting.
  • Mechanical breakdown.

Additional coverages can be purchased to address these exclusions, such as inland marine to protect your tools and equipment left on site from exposures such as theft and vandalism. It should also be noted that design risks should be covered by some type of professional liability, such as contractors liability insurance. To fully understand coverage you should contact a builders risk insurance specialist who will help you in estimating perils and limits for your specific construction project.

Find your lowest business insurance rates.

Find your lowest
builders risk rates

We take the time to make sure your project length and limits are estimated correctly, then we get to work finding the lowest rates available for your insurance coverage.

  • National builders risk specialists.
  • Licensed throughout the United States.
  • Multiple carrier discounts available.
Compare quotes from over 35 carriers.

Compare quotes
from over 35 carriers

Once we've got your best quotes back from our carriers, we take the time to help you understand your options and take the next steps to get you covered quickly.

  • Easy and fast quoting and binding process.
  • We'll help you insure both short-term and long-term construction projects.
  • We continue to follow up after binding; our service to you never ends.

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Builders Risk Insurance
We shop your personal insurance to save you time and money.

Why Do I Need Builders Risk Insurance?

Builders risk is a type of property insurance, so if you have construction planned for property which is already covered under a commercial or personal property policy (such as Homeowners) you will need to determine if new construction risks are covered. If not, you will definitely need a builders risk policy, as well. For example, if the structure you are working in is vacant or new construction, standard property or homeowners policies will not likely apply. Builders risk can be held by the property owner or the contractor/subcontractor hired to perform the work. You may need a builders risk policy if, for example:

  • You have purchased a home or other structure as an investment, with intentions on renovation, that will remain vacant until finished.
  • You are building from the ground up.
  • You have purchased a bank-owned home or property that will be renovated before use.

What Does Builders Risk Insurance Cost?

Builders risk rates will be determined by project length and required limits of protection, as well as included/added coverages. It is very important to be as accurate as possible when determining coverage length and limits, being careful to not over or under estimate. The general suggestion for basing your limits is to use the total value of the structure, including all materials and labor costs and excluding land value. Having an accurate construction budget is the best start to understanding how much coverage to purchase for your project. Your rate may be calculated from construction costs, between one and four percent, typically.

What are Common Builders Risk Claims?

According to the International Risk Management Institute (IRMI) water damage is the number one cause of builders risk claims with about 45 percent of all claims (2015). Theft/burglary make up 10 percent of claims, making it the second most common. Fire (6 percent), wind storms (4 percent) and collapse (3 percent) are also notably common. However, "other" describes 30 percent of claims, meaning there are numerous other ways builders risk can cover your job site. Knowing your site-specific risks is extremely important before purchasing coverage.

While builders risk mostly applies to property damage, and faulty work is not covered, the subsequential damage can be. For example, if faulty construction led to infiltration of rain water, builders risk will cover the resulting damage. Note, that rain water damage is covered, but sewer water damage may not be. A few more builders risk claim examples include:

  • Vandals break into work site and start fire which leads to damage throughout site.
  • Removal of temporary propane tanks causes damage to the exterior walls of the project.
  • Heavy wave conditions caused damage to underwater piling resulting in the need for significant remodel work. (This is also a good example of knowing your site-specific exposures and why you should try to minimize them.)

How Can I Reduce my Risk?

Reducing your builders risk exposures starts with identifying all conceivable perils to project. The best second step is documenting them and creating mitigation plans for each risk. For example, if you know your project is located in a high-crime area you may increase your security procedures for this project. Another example would be ensuring your job site is covered and protected before wind or rain storms are predicted. Once you identify perils and their mitigation plans, make sure to train job site employees on safety and preventative procedures.

Frequently Asked Questions

  1. Will builders risk cover materials for my job, even if they are not on site yet?
  2. Typically, builders risk policies will cover materials located on site with some additional and often limited coverage to materials kept off-site or in transit. Make sure to tell your agent if you think you need coverage for tools and equipment either on-site, off-site or in transit.

  3. What if my company carries inland marine and general liability, do i still need builders risk?
  4. The best way to know if you need builders risk is to contacta construction and commercial insurance specialist. One of our experts can look at all your other business insurance policies and help you make a list of gaps in coverage. You will need to identify specific perils on job site as well as project limit needed before assessing if your current coverage will apply.

  5. Does builders risk cover my work after completion?
  6. Builders risk alone may not cover completed work. Faulty workmanship or flaws in design/specifications will need a form of professional liability, such as contractors liability.

  7. Who is covered?
  8. The property owner is typically the named insured, while others such as contractors, subcontractors and financial lenders can be added as additional insureds.

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Whether you are looking for the best coverage or to save more money over your current policy, our fast and friendly service staff is always here to help. As we work with numerous carriers across the United States we can offer more products at the best competitive rates. We at The Insurance Shop don't stop there, we also have a highly trained and experienced customer service team who guide and support you both before and after you've obtained your coverage.

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