Builders Risk — Insurance Claims Definition
Short-term property insurance covering a building under construction or renovation against damage during the project.
Builders risk insurance covers the structure, materials on site, and sometimes scaffolding and temporary structures during construction or major renovation. Covered causes are usually specified; theft of materials and weather damage are common claim themes.
The policy duration aligns with the project; extensions may be needed for delays. Soft costs coverage can insure delay-related financial loss. The owner, contractor, or lender may be named insured depending on the contract.
Examples
Framing and roofing materials are stolen from a job site overnight; builders risk pays for replacement materials subject to deductible and sublimits on theft.
Common Mistakes
Assuming homeowners insurance covers a full rebuild while the owner acts as general contractor is a frequent gap — a dedicated builders risk policy is usually required.
