Protect the structure you are building from fire, theft, vandalism, wind, and other damage during the course of construction -- before a standard property policy can apply.
Get a Builders Risk QuoteBuilders risk insurance -- also called course of construction insurance -- covers a building or structure while it is being constructed or substantially renovated. Standard commercial property policies cover completed, occupied buildings. Builders risk fills the gap during the construction period, when the structure is most vulnerable and a traditional property policy does not yet apply.
The policy covers the structure itself, materials stored on site, and in some cases materials in transit to the site. It responds to physical loss or damage from covered causes -- typically fire, lightning, windstorm, hail, theft, vandalism, and vehicle impact on open perils (special form) policies, or a defined list of named perils on more basic forms. When a covered loss occurs, builders risk pays the cost to repair or replace the damaged portions of the structure.
Builders risk policies are temporary by nature. They are written for the duration of the construction project and expire when the building reaches substantial completion, is occupied, or the policy period ends -- whichever comes first. For contractors handling multiple projects simultaneously or a continuous flow of work, some carriers offer rolling or continuous builders risk programs that cover projects as they begin and remove them as they complete.
A partially completed structure is exposed to risks that neither the owner's existing property policy nor the contractor's GL will fully address. A fire or storm midway through a project can be financially devastating without builders risk.
A fire breaks out in a partially framed wood structure, destroying weeks of work and thousands in materials. The owner's existing property policy does not cover new construction in progress. Without builders risk, the entire loss -- structure and materials -- is uninsured. Builders risk covers the rebuild from the point of loss.
A named storm passes through before the roof is complete. Wind peels back the temporary sheeting, and rain causes extensive damage to framing and materials inside the structure. Builders risk covers the storm damage. In Florida, wind coverage is a critical consideration -- some policies require a specific wind endorsement for named storms.
Copper wiring and plumbing fixtures are stolen from a nearly complete commercial build-out. The materials are already installed in the structure, so inland marine's coverage of materials in transit does not apply. Builders risk covers theft of materials that have been incorporated into or are stored at the project site.
Florida's hurricane risk is the dominant underwriting consideration for builders risk in the state. Unlike commercial property policies where wind and hurricane coverage is often bundled, builders risk policies in Florida frequently require separate consideration of wind and named storm coverage. Carriers may exclude wind damage entirely, require a separate wind deductible (often 2-5% of insured value per occurrence), or exclude named storms altogether. Contractors and owners purchasing builders risk in Florida must read the wind provisions carefully and verify what is actually covered.
Florida Statute Section 627.706 governs sinkhole coverage in the state, and some builders risk policies include sinkhole as a covered peril while others exclude it explicitly. In certain Central Florida counties where sinkhole activity is elevated, verifying sinkhole inclusion is particularly important. Construction in areas with known karst topography should specifically address this exposure.
One of the most frequently disputed questions on any Florida construction project is who is responsible for purchasing builders risk -- the owner or the general contractor. This is a contractual question, not an insurance question. AIA contract forms (A201 and related) typically assign builders risk responsibility to the owner. Many custom commercial contracts, however, shift that obligation to the GC. Before bidding a project, confirm who is required to provide builders risk, what coverage form is required, and what the minimum insured value must be. Failure to carry required builders risk can result in contract breach and exposure to uncovered losses.
A partially completed structure is exposed from day one. Whether you are the GC or the owner, we can structure a builders risk program that covers the project through completion and accounts for Florida's wind exposure.
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