What does builders risk insurance cover during construction?

Builders risk insurance covers physical damage to a structure under construction. It typically includes protection against fire, theft, vandalism, wind, water damage, and losses related to materials, equipment, and labor. Some policies can also extend to soft costs, debris removal, and ordinance changes.

Who is responsible for purchasing builders risk insurance, the owner or the contractor?

The responsibility depends on the contract. In most cases, the property owner or developer purchases the policy to protect their financial interest. However, some contracts require the general contractor to carry the policy. It’s essential to confirm responsibilities in writing before work begins.

How do I get a builders risk insurance quote for my project?

To request a builders risk insurance quote, you’ll need to provide project details including the location, type of construction, total build cost, timeline, and who is involved. A qualified advisor will use this information to source quotes from vetted carriers and explain coverage differences.

Which types of construction projects qualify for builders risk insurance?

Builders risk policies can cover residential and commercial projects. These include ground-up builds, major renovations, multi-family conversions, tenant improvements, and even modular or prefabricated structures, provided the scope and timeline are clearly defined.

What’s the difference between builders risk insurance and general liability coverage?

Builders risk covers property damage to the structure during construction. General liability covers third-party injury or property damage caused by the contractor’s operations. Both are essential, but they protect different exposures.

Builders Risk

Builders Risk Insurance for New Construction and Projects Under Construction in NY, NJ & CT

Builders risk insurance, sometimes called course of construction insurance, is essential protection for projects in progress. Whether you are a developer building a multi-family property, a contractor renovating an office building, or a homeowner adding an extension, the financial risks during construction are significant. Fire, theft, vandalism, and severe weather can cause costly delays and damage. Builders risk insurance provides a safety net, ensuring projects can continue without catastrophic financial loss.

Refine Risk structures builders risk insurance for contractors, developers, and property owners across New York, New Jersey, and Connecticut. Our advisors understand regional risks, lender requirements, and the realities of construction timelines, making sure coverage aligns with the full scope of your project.

What Is Builders Risk Insurance?

Builders risk insurance is a specialized property insurance policy designed for buildings under construction, renovation, or repair. Unlike standard property insurance, it applies only during the course of construction. Coverage typically extends from groundbreaking until completion and occupancy, though extensions are available if projects run longer than expected.

What Does Builders Risk Insurance Cover?

Builders risk insurance protects against many of the most common and costly construction risks. Coverage may include:

Property Damage – Fire, wind, hail, explosion, and other perils
Theft and Vandalism – Loss of materials, equipment, or partially built structures
Materials in Transit – Coverage while materials are being delivered to the site
On-Site Materials – Protection for items stored on-site but not yet installed
Temporary Structures – Coverage for scaffolding, fencing, or site trailers
Soft Costs – Protection against financial losses tied to delays, such as loan interest, real estate taxes, and additional permit fees

Builders risk does not cover liability for injuries, accidents involving workers, or tools owned by contractors. These risks are addressed under general liability and contractor’s equipment insurance.

Common Risks for Builders and Developers in the Tri-State Area

Construction projects in New York, New Jersey, and Connecticut face unique exposures:

Severe Weather – Nor’easters and hurricanes can damage partially completed structures
Theft of Materials – High-value items such as copper wiring, appliances, and lumber are frequent targets
Fire During Renovations – Welding or electrical work can trigger costly losses
Vandalism and Trespassing – Idle construction sites may be damaged by intruders
Delivery and Storage Issues – Materials in transit or awaiting installation face risk of theft or weather damage

These risks can quickly derail construction schedules. Builders risk insurance provides financial continuity, keeping projects on track.

How Much Does Builders Risk Insurance Cost?

Premiums for builders risk insurance typically range between 1% and 4% of total construction costs. Several factors determine cost:

Project type (new construction, renovation, or addition)
Location and local weather risks
Project value and duration
Security measures at the site
Scope of coverage (property only vs. inclusion of soft costs)

For example, a $5 million commercial construction project might carry a premium between $50,000 and $200,000, depending on risk profile and coverage selections.

Is Builders Risk Insurance Required in NY, NJ, and CT?

Builders risk insurance is not legally required by state law, but it is often mandated by lenders, municipalities, or project owners. In New York City, proof of coverage may be necessary before permits are issued for large projects. Lenders across New Jersey and Connecticut commonly require builders risk as a condition of financing. Even when not required, builders risk is strongly recommended, as uninsured losses during construction can be financially devastating.

Who Needs Builders Risk Insurance?

Builders risk insurance may be purchased by:

Property owners financing construction projects
Developers overseeing multi-unit or commercial builds
General contractors responsible for project completion
Homeowners undertaking major renovations or additions

The responsible party varies by contract. Refine Risk helps clients clarify responsibilities and secure the right policy based on contractual obligations.

Benefits of Working with a Local Insurance Agent

Construction in the Tri-State area involves strict regulations, weather exposures, and high project values. Working with a local advisor provides:

Understanding of municipal and lender requirements in NY, NJ, and CT
Guidance on project-specific risks, from coastal flood exposure to urban theft
Access to policies that include both property damage and soft cost protection
Tailored coverage terms aligned with construction timelines and contract structures

Why Choose Refine Risk for Builders Risk Insurance

Expertise in construction and development projects across the Tri-State area
Ability to integrate builders risk with general liability, contractor’s equipment, and umbrella policies
Access to national carriers with specialized construction coverage
Annual reviews and project-specific guidance for ongoing construction pipelines

Refine Risk provides more than policies, we provide strategy and continuity for builders, contractors, and property owners.

Things to Know About Builders Risk Insurance

What does builders risk insurance cover?
It covers damage to property under construction, theft or vandalism of materials, materials in transit, and certain soft costs tied to project delays.

How much does builders risk insurance cost?
Premiums typically range from 1% to 4% of total construction costs, depending on project type, value, and risk factors.

Who is responsible for purchasing builders risk insurance?
It depends on contract terms. Policies may be purchased by the property owner, developer, or general contractor.

Is builders risk insurance required in New York, New Jersey, or Connecticut?
It is not legally required, but lenders, municipalities, and project owners often mandate coverage as a condition of financing or permitting.

Does builders risk cover subcontractors’ tools or liability?
No. Builders risk covers property and materials, not liability or contractor-owned tools. Separate policies are needed for those risks.

Protect Your Project with Refine Risk

Protect your investment, timelines, and financial stability with builders risk insurance tailored to your project. Request a consultation with Refine Risk today to secure coverage for your construction or renovation.

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