If you’re in the construction or renovation business, you’ve probably heard of builder’s risk insurance, also known as course of construction insurance.  

There’s a saying among many in the construction industry that builder’s risk insurance forms the foundation of a good risk management plan—but why?  

The simple answer is that builder’s risk insurance can protect your commercial or residential project from common construction hazards, allowing you to focus on risks specific to your project and ensuring the work gets done right.  

What does builder’s risk insurance cover?  

As a subset inland marine coverage, builder’s risk policies can be written to cover a variety of projects such as roadwork construction, new schools or renovations of existing structures. They generally cover damage to property resulting from:  

• Fire. 
• Explosions.  
• Collapse. 
• Lightning and hail.  
• Theft and vandalism. 
• Vehicle or aircraft collisions. 
• Debris removal needed following a covered loss.  

A builder's risk policy covers buildings and structures under construction, as well as any covered materials, supplies or equipment needed for that project, whether on site, in transit or at another location. It can also be tailored to cover specialized risks related to your project, such as scaffolding, earthquakes and floods, or lost revenue from unavoidable delays.

What doesn’t builder’s risk insurance cover?  

Builder's risk policies typically exclude the following from coverage:

• Employee/internal theft. 
• Problems related to faulty design, materials or workmanship.  
• Equipment breakdown (an optional coverage). 
• Contractual penalties. 

Note that builder’s risk insurance does not replace general liability insurance, meaning it does not protect you or your company from bodily injury or property damage caused by accidents, or from professional liability for errors or omissions in your work (known as E&O insurance). 

Starting your builder’s risk insurance quote  

Builder’s risk insurance may form the foundation for your risk management efforts, but it takes a holistic and comprehensive plan to make sure your project is protected from groundbreaking to grand opening. 

There are many other construction-focused coverage options you may want to consider for your project. The best place to start is by talking to an insurance agent with construction-specific expertise who can help outline the strengths and gaps in your current coverage and recommend alternatives. 

The good news is that builder’s risk insurance won’t bust your project budget. Policies typically cost a small percentage of total construction costs, depending on the deductibles and optional endorsements. 

If you’re ready to explore your builder’s risk insurance options, reach out to a UFG Insurance agent. They can explain your options and quickly tailor coverage to your specific project with the help of UFG's monoline builder’s risk team.