Builders’ Risk
Insurance
Your Work Builds the Future—Our Coverage Keeps It Secure
Spotlight on: Builders’ Risk Insurance
Every construction project carries risks—from theft and vandalism to fire, weather damage, or accidental loss of materials. If you have a financial interest in a project, Builders’ Risk Insurance is essential protection.
This specialized coverage helps safeguard contractors, property owners, architects, engineers, and other stakeholders from losses that occur while a building is under construction. In many cases, lenders require this coverage and must be listed as named insureds on the policy.
Most builders’ risk policies also include a waiver of subrogation, which prevents the insurer from pursuing legal recovery against a negligent third party after paying a claim—helping protect project owners from potential lawsuits.
What Is Builders’ Risk Insurance?
Also known as Course of Construction Insurance, Builders’ Risk Insurance covers damage or loss to construction projects while they are underway. This includes protection for:
Buildings or structures under construction
Uninstalled materials, fixtures, and supplies on site
Tools and equipment used in the construction or stored off-site ⎯ if covered by your policy
Soft costs such as borrowed money interest, real estate taxes, or lost rental income during downtime from a covered loss
The coverage begins on the policy’s effective date and usually ends when the project is finished, occupied, or transferred to use.
Who Needs Builders’ Risk Insurance?
If you have a financial interest in a construction or renovation project, Builders’ Risk Insurance is strongly recommended. Typical parties include:
General contractors
Subcontractors
Property owners / Developers
Architects or engineers when required by contract or financing parties
In many cases, lenders will require you to carry this insurance and specify that you be listed as a named insured.
What Does It Cover?
Builders’ Risk policies typically cover loss or damage due to many perils, such as:
Fire
Theft
Vandalism
Windstorms, hail
Lightning, explosion
Flood or earthquake — depending on policy or included endorsements
It may also cover financial losses related to damage, such as lost rental income, interest on loans, or real estate taxes during delays caused by a covered peril.
Common Exclusions & Limitations
As with all insurance, there are things Builders’ Risk typically does not cover. Some common exclusions are:
Defective workmanship, poor design, or planning errors
Rust, mold, or deterioration due to age or environmental exposure over time
Intentional acts, war or terrorism
Mechanical breakdowns unless endorsed
Some natural disasters — flood, earthquake, wind in certain areas — may be excluded unless specifically added through endorsements
Key Considerations When Choosing Coverage
Factor
Estimated project value (“completed value”)
Start and end dates
Soft costs / delay coverage
Named insureds and subrogation waivers
Endorsements to fill gaps
Why It Matters
Determines policy limits — must be accurate so you are not underinsured.
Ensures coverage is in effect during the entire construction period.
Losses outside direct damage (loan interest, lost income) can be significant.
Who is insured (owner, general contractor, subcontractors) and whether subrogation is waived are key contractual items.
Add flood, earthquake, theft of material off-site, increased coverage for materials in transit, etc.
Frequently Asked Questions
Do I need Builders’ Risk if I already have commercial property insurance?
Usually yes. Standard commercial property policies don’t cover buildings under construction or materials in transit/off-site. Builders’ Risk fills that gap.
Who should purchase the policy — owner or contractor?
It depends on contractual agreements and financial interest. Often the owner or lender requires it, but contractors may also carry it or share responsibility.
What happens after project completion?
Once construction is substantially complete and the building is ready for occupancy, the Builders’ Risk policy typically ends and permanent property insurance takes over.
Can I insure materials stored off-site or in transit?
Often yes, if endorsed. This is very important for projects with material staging or off-site storage.
Why Choose DAP Insurance Agency for Builders’ Risk?
Every build starts with a vision—an empty lot transformed into something lasting. But between the first blueprint and the final beam, countless risks can stand in the way. Builders’ Risk Insurance from DAP Insurance Agency helps ensure your progress stays protected at every stage.
Our tailored coverage aligns with your contracts, timelines, and exposures, backed by strong carrier relationships and expert guidance on compliance, safety, and risk prevention. From navigating lender requirements to managing claims, we’re there to keep your project moving—safely and securely.
Because at DAP, we don’t just insure structures. We help protect the effort, investment, and ambition behind every build.
When you’re ready to talk, we’re here to listen.
Every smart plan starts with a simple chat.
Let’s talk through your needs and find the right fit together.
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