Call Us Today:
925.523.7480

What is Builder's Risk Insurance?

Existing buildings are exposed to a wide variety of threats—fire, flooding, and vandalism are just a few of the ways building structures can be harmed. However, buildings under construction aren't ready to face risks that completed buildings can withstand. There's also the chance of an accident during the construction phase, like materials being destroyed or installed incorrectly. A proper risk analysis from our Hindsight Insurance Services agents can help reduce the number of threats a new construction faces, and our agents can help reveal additional threats that may need to be covered by additional policies.

Builder's risk insurance is a policy designed to mitigate the chance of loss and protect you in the event that damage is done to the building. This policy is most commonly purchased by landowners and those funding the project, although some contractors purchase it in order to have more control over how each job is insured.

This policy is mainly designed for new construction, rather than changes and improvements to existing buildings. That form of construction is usually covered by property insurance and does not need any additional coverage, although it's best to talk with an agent before starting any particularly large project just to be absolutely sure it's covered.

What Does Builder's Risk Insurance Cover? What Does It Not Cover?

Builder's Risk Insurance generally covers the owner, the lending institution, the contractor(s) performing the work, and other related parties. In addition to providing coverage for damage to the building itself, most plans also cover temporary constructs (like scaffolding), materials, and equipment being used (whether it's currently on-site or off-site). The majority of policies are written on an all-perils basis, which means that reimbursements are available for any losses except those specifically excluded.

Common exclusions from this coverage include (but are not limited to):

  • The value of the land itself
  • Employee theft
  • Damages beyond the estimated value of the construction
  • Any losses brought by law or ordinance changes
  • Damage from earthquakes
  • Losses from war, nuclear hazards, or actions by civil authority

As you can see, most of the exclusions are not likely to occur during the course of a normal construction project. The value of the land is the only one likely to change as new work is done, and you will likely need to account for any improvements or losses the next time your company prepares taxes.

Builder's Risk Insurance Policy Lengths

Most policies last until the building is no longer under construction. The exact point at which this occurs can vary—it may be when certain parts of the structure are done (but finishing work, like painting, has not been completed), up to the day it opens for business, or when the contract with the construction company ends. If you're worried about interim risks—like the building being damaged between when construction finishes and when it opens for business—talk to one of our agents and ask about extending your coverage.

 

1. "Threat/Vulnerability Assessments and Risk Analysis." WBDG. Accessed April 20, 2016. https://www.wbdg.org/resources/riskanalysis.php.

2. "Who Should Buy Builder’s Risk Insurance?" BuildingAdvisor. Accessed April 20, 2016. http://buildingadvisor.com/who-should-buy-builders-risk-insurance/.

3. "How Do I Account for Land improvements?" Questions & Answers - AccountingTools. Accessed April 20, 2016. http://www.accountingtools.com/questions-and-answers/how-do-i-account-for-land-improvements.html.

Our Locations

Hindsight Insurance Services

2349 Willow Pass Rd.
Concord, CA 94520
Main office: 925-523-7480
Toll free: 800-264-4637

Hindsight Insurance Services Novato

1615 Hill Road, STE H
Novato, CA 94947
Main office: 415-300-2436

Our Providers

Testimonials

Where to begin? I've used Hindsight for our complete suite of business insurance needs for approximately 20 years now. As a business owner, I live by the old fashioned credo of taking care of the customer -- and so do the folks at Hindsight. As a Hindsight client I feel we have a relationship based on trust and good service. I can't recommend them highly enough.
Rick Weldon -PR Motorsports
For more than 25 years we have relied on Mark Hinds at Hindsight Insurance Services for our workers compensation, business and property insurance needs. We have appreciated the personal and detailed attention to our concerns. Don Worth, President The Model Garage, Inc. Berkeley Ca
Don Worth
We have been customers of Hindsight Insurance Services for many years. I cannot say enough about how incredible they are. They get us the best rates and whenever I have a question they go above and beyond to answer my questions and never make me feel like I am taking to much of their time. They have always been very nice and very helpful. I highly recommend them! - J. Schumacker, Moraga Motors, Inc.
J. Schumaker