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.

Where this term matters

Business Insurance →/business/contractor-insurance →/business/general-liability →

Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

Inland Marine InsuranceInland marine insurance fills gaps in commercial property coverage by insuring property that moves, is stored off-site, or requires specialized valuation.General Liability InsuranceGeneral liability insurance is the foundational business policy covering lawsuits from customers, vendors, or bystanders injured on your premises or by your operations.Completed Operations CoverageCompleted operations coverage protects contractors and service businesses from injury or damage claims that arise after a job is done, not just while work is in progress.Commercial Package Policy (CPP)A Commercial Package Policy (CPP) offers mid-sized and larger businesses a flexible framework to bundle multiple coverage lines into one policy, providing broader customization than a standard BOP.
Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
CF

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 June 2026

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