Builders Risk Insurance, also called Course of Construction (COC) Insurance, is a type of property insurance covering buildings under construction, materials & labor costs, and other expenses associated with a construction or remodel project.

These important insurance policies can be written on a three, six, and twelve month basis or even a reporting form basis for Developers and Spec Home builders. And since construction projects are prone to delays, Builders Risk insurance carriers are usually able to extend the policy at least once if the project is not completed on time.

A Builders Risk insurance policy differs from a Commercial General Liability (CGL) policy in that a CGL policy covers bodily injury or property damage to a third party due to the policy holder’s alleged negligent acts. Basically, the policy holder never receives any checks from the insurance carrier with a CGL policy; the checks always go to the person who was injured or owned the damaged property. A Builders Risk insurance policy pays out to the holder of the policy, meaning if a building is damaged due to a covered loss, the insurance carrier is cutting the check to the holder of the policy so construction can resume.

Builders Risk Insurance covers material and labor costs associated with the construction or remodel of a home or building. Construction materials such as lumber, drywall, plumbing & lighting fixtures, HVAC units, and other materials are all prone to damage or loss during construction and the costs & time to replace them can significantly delay or even terminate a project. Builders Risk insurance can be structured to cover Property Damage (construction material, fencing, scaffolding, etc), Theft, Natural & Man-Made Disasters (fire, lightning, explosion, etc) even Soft Costs (architects/engineer fees, interest, insurance). If you’re a Spec Home Builder or Developer, Builders Risk insurance can even be written to provide coverage for your potential Profit if property is damaged or destroyed before completion.

*Refer to your specific insurance policies for details on coverages, conditions, and exclusions.

Builders Risk Insurance is designed to get your project back on track after a fire, theft, vandalism, or other covered loss. Claims involving bodily injury or third party property damage are not covered under a Builders Risk policy and would instead be covered under a Commercial General Liability (CGL) policy. Common exclusions in a Builders Risk insurance policy are the land on which the project is being built/remodeled, flood, earthquake, and contractor’s tools & equipment,

*Refer to your specific insurance policies for details on coverages, conditions, and exclusions

The impact of accidental and unpredictable events can be disastrous to your construction project. Builders Risk insurance is meant to get the construction project resumed quickly by providing the finances to replace lost or damaged covered property. If you are a Homeowner, most homeowner’s policies do not provide coverage for structures under construction or remodel. If you are a Spec Home Builder or Developer, most construction lenders require you to carry a Builders Risk insurance policy but more importantly, inadequate coverage could mean disaster to your project’s bottom line.