What Does Builders Risk Insurance Cover?


Builders risk insurance covers the costs involved in a variety of construction-related risks. These risks include delayed construction, additional interest on financing, real estate taxes, architectural fees, and permit fees. While builder risk insurance can protect a property against such risks, it is best to consider a permanent property insurance policy before you purchase a new home.


While most insurers will customize a policy to suit your needs, it’s best to make sure the policy covers exactly what you need. You can clarify this by sharing the terms of your contract with the insurer. Also, make sure you specify the named insureds and additional covered parties. Once you know that builders risk insurance is necessary for your construction project, your contractor will factor this cost into their bid. Keep in mind that the costs of insurance are borne by the project owner, so you’ll need to know exactly how much you’ll be paying to get it.


Builders risk insurance covers the costs of property on construction sites, including materials damaged by weather or accidents. It can even cover materials that are stored offsite. It also covers cleanup costs, such as debris removal. It also protects documents and data, including blueprints and specifications. The policy also covers temporary structures.


Builders risk insurance typically costs between 1% and 5% of the overall construction budget. For a $100,000 construction project, this would mean a policy costing between $600 and $3300. It’s best to get a quote from a reputable insurance broker before deciding on a policy. This will allow them to understand the exact costs involved and tailor a policy to suit the specifics of your construction project.


While builders risk insurance isn’t required by law, it’s still wise to obtain it. In fact, some projects may require you to get it if you want to take advantage of certain government programs and contracts. Having it in place before you start construction will protect you and your customers from unforeseen expenses.


State Farm is one of the best builders risk insurance providers. It provides flexible policies with extensive coverage options. State Farm’s builders risk policies cover damage to buildings, comprehensive general liability, equipment breakdown, and municipal law. Furthermore, State Farm agents will work closely with you to customize your policy. State Farm is the most flexible option in terms of builders risk coverage.