Builders Risk — coverage for the project itself.

What Builders Risk Covers

The structure under construction — and depending on form, materials at the job site, materials in transit, and temporary structures (scaffolding, fences, trailers) related to the project.

Standard Builders Risk includes fire, lightning, wind (subject to deductible), theft, vandalism, weather damage, and accidental damage during construction. Optional coverages include earthquake, flood, soft costs (lost rents, additional financing costs), and extended period coverage past the planned completion date.

Who Buys It

Depends on the project structure. On most commercial jobs, the property owner buys Builders Risk (often required by their lender). On residential remodel and addition work, the contractor often buys it because the homeowner’s policy excludes ongoing construction. Read the contract. Whoever’s named is the one whose carrier responds at claim time.

If you’re the GC and the owner is buying, you typically want to be named as an additional insured on their Builders Risk policy. If you’re buying, you typically want the owner named. Either way, the insurable interest and the claim party need to be aligned.

Project Policy vs. Annual Reporting Form

• Project policy — written for one specific project with a defined site, value, and term. Best for larger one-off projects ($500K+) and projects with unusual exposure.
• Annual reporting form — covers all your projects under a single annual policy. You report new projects as they start (or report monthly/quarterly totals depending on the form). Best for contractors running many smaller projects.

For a GC doing 6–10 residential additions per year, the annual reporting form is almost always cheaper and operationally simpler than 6–10 project policies. For a contractor doing one $4M commercial fit-out per year and a few small jobs, a project policy on the big one plus an annual reporting form for the rest is the right mix.

What Builders Risk Does NOT Cover

• Faulty workmanship — the policy covers damage to the structure, not your defective work. (Your GL handles third-party damage; defective work itself is generally a contractor problem.)
• Wear and tear, deterioration — standard exclusions.
• Earth movement and flood — typically excluded; available by endorsement.
• Mold — usually excluded unless added back by endorsement.
• Off-site materials — covered only if the policy form includes off-site coverage (most do, but with sublimits).