The cost of a builder's risk policy (also called course of construction insurance) is based on the total completed value of your structure along with other project factors. This includes the cost of all materials and labor, but excludes land value.
Small businesses pay an average premium of $105 per month, or about $1,259 annually, for builder's risk insurance.
Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
While Insureon's small business customers pay an average of $105 monthly for builder's risk insurance coverage, 49% pay less than $100 and 26% pay between $100 and $200 per month.
The cost depends on the construction project. Policy costs are typically between 1% and 4% of the total completed value of the structure, which includes construction costs.
Builder’s risk insurance comes in a wide range of coverage limits. Higher limits cost more, but cover more expensive claims. The average limit for Insureon customers who buy a builder's risk policy is $460,000, with no deductible.
A builder's risk policy covers incidents such as vandalism or theft of building materials at a construction site, up to the policy limit. For example, this policy covers costs if a natural disaster causes water damage to the existing structure, or a fire on a job site destroys a pile of lumber.
To protect your small business from all risks, you should consider purchasing additional liability coverages, such as general liability insurance for financial protection against third-party bodily injuries and property damage; commercial property insurance to cover damage done to your own business property; and professional liability insurance, for protection against lawsuits related to performance and workmanship.
View our recommended policies for both well established and new construction businesses and contractors.
Your policy limit is just one factor that will impact your builder's risk insurance rates.
Your insurance provider will also look at the following when calculating your premium:
For building projects that involve expensive construction materials or high labor costs, you would need a builder's risk policy with higher limits. This will increase your premium.
Many builder’s risk policies have multimillion dollar coverage limits that can, for example, cover $10 million or more of damage per incident.
If you have materials and equipment that you bring from one job site to another, you may need inland marine insurance or contractor's tools and equipment coverage. These policies protect your tools and other property while in transit, which isn't the type of perils that builder's risk insurance covers.
Builder’s risk insurance policies sometimes provide different coverage limits for different construction classifications and construction types. For example, a plan might include a $5 million limit for a frame structure and a $10 million limit for a joisted masonry structure.
Similarly, the size of the construction site could also impact your premium, as the cost of builder's risk insurance for a residential property would likely be less than coverage for a larger commercial structure.
You can also add coverage extensions and additional endorsements, such as coverage for a temporary structure or debris removal after a loss.
It's simple: The more workers you have, the more opportunities there are for incidents (e.g., employee theft) to occur. For this reason, a business with a lot of employees will likely pay more for a builder's risk policy than one with just a few workers doing a small renovation project.
If an employee gets hurt on the job, builder's risk insurance won't cover their medical bills or legal expenses. Instead, you would need workers' compensation insurance.
The location of a construction project can play a large role in the premium that you pay. For example, job sites that are located in areas with higher crime rates or at at an elevated risk of natural disaster may have to pay higher premiums than those located in areas where these occurrences are lower.
For instance, small business owners in Florida or Texas may have a higher cost for a builder's risk insurance policy than those taking on projects in Colorado due to the seasonal risk of hurricane or other storm damage.
While builder's risk premiums may fluctuate based on where a project is located, it could still save you in the long run should any damage occur to your structure or building materials due to a covered event.
There are several things you can do to keep your builder's risk coverage costs low and stay in your construction budget.
Some strategies include:
Insuring your small business doesn't have to cost a fortune. At Insureon, we help you find affordable coverage that meets the unique needs of your small business, through a single online application. That way you can get peace of mind without breaking the bank.
Insureon is the #1 independent agency for online delivery of small business insurance. We help business owners compare quotes from top-rated providers, buy policies, and manage their different types of coverage online.
By completing Insureon’s easy online application today, you can compare free quotes for builder's risk insurance and other types of insurance from top-rated U.S. insurance companies. Insureon insurance agents are available to help answer any questions and provide guidance about your coverage needs.
Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.
Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for different types of policies.