What does builder’s risk insurance cover?

Builder’s risk insurance covers the cost of damage caused by non-severe weather events, such as wind, rain, and hail.

Example: Freezing rain damages the lumber on a construction site. The carpenter is responsible for replacing it, so he turns to his builder’s risk insurance to cover the cost.

A fire at a construction site could severely damage building materials or an unfinished structure. Builder’s risk insurance covers the cost of replacing or repairing items damaged by fire.

Example: A fire sweeps through a construction site, scorching the siding of an unfinished building. To replace the siding, the general contractor makes a builder’s risk insurance claim.

A vandal can set a construction project back months by breaking windows, destroying fixtures, and spray painting walls. If your construction site is vandalized, builder’s risk insurance can reimburse you for the damage so you can continue working on the project.

Example: A vandal pulls the electrical wiring from an unfinished building, forcing the electrician to rewire the entire structure. The electrician's builder's risk policy helps cover the repair costs.

Because construction sites are often left unguarded, they are a common target for thieves. Builder’s risk insurance can help compensate you for stolen materials.

Example: A thief breaks into a construction site and makes off with thousands of dollars' worth of copper pipes. The plumber uses builder’s risk insurance to replace the pipes.

Builder’s risk insurance doesn’t usually cover the damage caused by natural disasters like floods, earthquakes, or tornadoes. To cover these types of events, add a severe weather endorsement to your policy.

Damage to tools and equipment is not usually covered by builder's risk insurance.

Contractor’s tools and equipment insurance helps pay to repair or replace lost, stolen, or damaged tools and equipment valued under $10,000. You may also see it called equipment floater insurance.

Builder’s risk insurance doesn’t cover damage to an unfinished structure that results from faulty design, construction, or materials. Professional liability insurance for construction workers and contractors helps protect your business from these liabilities.

Builder’s risk insurance does not protect employees from injuries or illnesses related to work on a construction site. Workers’ compensation insurance helps pay medical costs and partial lost wages resulting from work injuries and occupational illnesses.