Who Should Carry Builders Risk Insurance?
July 21, 2021

Who Should Carry Builders Risk Insurance?

Builders risk insurance is designed to protect construction projects that are damaged due to fire, wind, hail, lightning, smoke, theft, vandalism and other incidents. If you work in any area of construction, you know that accidents and natural disasters can put a project far behind, especially if materials or equipment are damaged. 

In general, anyone with stake in a construction project should carry or be listed on a builders risk insurance policy. This may include: 

  • Property ownersyellow hard hat and tool belt 

  • General contractors 

  • Subcontractors 

  • Lenders 

  • Architects 

  • Engineers 

  • Developers 

Who Buys a Builders Risk Insurance Policy? 
The primary policy holders are generally contractors, business owners and homeowners. This insurance is crucial for protecting a project while it’s underway. Incomplete projects are at much more mercy to the elements, theft and vandalism than normal structures. The same goes for equipment that is possibly left overnight at the construction site. This insurance doubles as protection for everyone involved, as it provides compensation for lost or damaged items necessary to complete the project. 

Is Builders Risk Insurance Required? 
Construction contracts often come with a requirement for builders risk insurance. Replacing a half-constructed home or expensive equipment can be costly, and no one wants to pay for starting over out of pocket. The quicker that compensation can be provided to cover the damages or losses, the quicker the project can be resumed and finished. This is why most businesses will require their contractors or subcontractors to carry builders risk insurance. 

How Much is Builders Risk Insurance? 
The cost of builders risk insurance varies depending on several factors, including the aspects of the project being insured. In general, you may pay anywhere between $1,000-$20,000 for a builders risk insurance policy. Other factors that affect these premiums are: 

  • Coverage limits 

  • Location 

  • Value of materials being used 

  • Duration of project 

  • Scope of project 

  • Claims history


Newer construction projects that require breaking ground, excavation, plumbing or other extensive construction may cost more to insure. You may choose to have a higher deductible to lower premium rates, but keep in mind that you will have to pay more up front before receiving reimbursement for a covered incident. 

This insurance is crucial for protecting you incase you have an investment in a construction project. Be sure to speak with an insurance agent about your builders risk insurance needs so that you can get the right policy at the best price. 

Tags: builders risk insurance

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