Business Insurance
Builders Risk Insurance
Builders risk insurance covers the structure, materials, and equipment at a construction site against fire, theft, vandalism, and weather damage during the build.
Last reviewed: May 2026 · Editorial methodology
Definition
Builders risk insurance is a temporary property policy that covers a structure under construction, renovation, or installation against named perils including fire, windstorm, hail, theft, and vandalism. Premiums are typically calculated as 1–5% of the total completed construction value; a $500,000 home build might cost $3,000–$10,000 for the policy term. The policy usually terminates automatically when the project reaches occupancy or the certificate of occupancy is issued, whichever comes first. General contractors, property owners, and lenders all have an insurable interest in a project, so disputes over who must carry the policy — and who is named — must be resolved in the construction contract before work begins. Flood and earthquake are almost universally excluded from builders risk forms and require separate coverage, a particularly important consideration for coastal or seismically active project sites. Delays in construction can leave coverage gaps if the policy expires before the project is complete, making mid-project policy extensions an important proactive step.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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