Builders Risk Insurance for Construction and Renovation Projects

Standard property policies were written for operating buildings — not for structures mid-construction. Builders risk fills that gap with project-specific coverage that travels with your timeline, from groundbreaking to certificate of occupancy.

What Builders Risk Insurance Actually Covers

Builders risk is a temporary, project-specific policy designed to cover a structure while it is under construction or undergoing major renovation. It is not a permanent property policy, and it is not a substitute for one. It exists because the risk profile of a building mid-construction — open to the elements, occupied by multiple trades, stocked with materials before any locks are on the doors — is fundamentally different from the risk profile of a finished, occupied property.

 

A builders risk policy typically covers:

 

  • The structure itself, including framing, foundations, and installed fixtures
  • Building materials and supplies stored on-site or in transit to the job site
  • Temporary structures such as scaffolding and construction trailers
  • Damage from fire, wind, lightning, vandalism, and theft
  • Soft costs in some policy forms, including architect fees, permit costs, and financing expenses triggered by a covered loss

 

What it does not cover is equally important to understand. Builders risk policies generally exclude contractor tools and equipment, workers compensation exposures, and liability arising from third-party injuries at the site. Those risks require separate coverage — and we can help you structure the full project insurance package, not just one piece of it.

Who Needs a Builders Risk Policy

Any party with a financial interest in a structure under construction has a legitimate reason to be named on a builders risk policy. In practice, that typically means real estate developers, property owners undertaking significant renovation, and general contractors responsible for delivering a finished structure.

 

For real estate developers, builders risk is a standard requirement — lenders will often mandate it as a condition of construction financing. For property owners managing a renovation, the assumption that an existing commercial property policy extends to the work in progress is one of the more costly misconceptions we encounter. Standard commercial property policies are written for buildings in normal use, not structures with open walls, active trades, and uninstalled materials on the floor.

 

Contractors may also carry builders risk on behalf of a project, depending on how the contract is structured. Regardless of who holds the policy, the coverage should be broad enough to reflect every party's financial exposure.

 

If your business operates in real estate development, construction, or property investment, our real estate industry page covers the broader insurance picture for your portfolio.

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What MJM Global Brings to Construction Risk Placement

We work with real estate developers, property owners, and contractors across the country. Whether you are breaking ground on a new commercial building, gut-renovating a mixed-use property, or managing a phased construction program across multiple sites, we will match your coverage to the actual scope and schedule of the work.

Common Questions About Builders Risk Coverage

  • What is builders risk insurance and how does it differ from commercial property insurance?

    Builders risk insurance is a temporary, project-specific policy that covers a structure during construction or major renovation. Commercial property insurance is written for completed, occupied buildings. A standard commercial property policy does not extend to structures under active construction — builders risk fills that gap for the duration of the project.

  • Do I need builders risk insurance if I already have a commercial property policy?

    In most cases, yes. Commercial property policies are designed for operating properties, not buildings under construction or renovation. If your property is undergoing significant structural work, your existing policy likely excludes the construction period. A builders risk policy provides the coverage your commercial property policy was not written to include.

  • How long does a builders risk policy last?

    Builders risk policies are issued for a set project term — commonly three, six, or twelve months — based on the anticipated construction schedule. The policy ends at substantial completion, occupancy, or the end of the term. If a project runs longer than expected, most policies can be extended, but the extension must be arranged before the original term expires.

  • What happens if my construction project goes over schedule?

    If your project is delayed, your builders risk policy can typically be extended to cover the additional time — provided you request the extension before the current term lapses. A policy that has already expired cannot be reinstated. We monitor active policies for clients approaching their expiration dates and coordinate extensions proactively when a project is running behind schedule.

  • Who should be named on a builders risk policy?

    Any party with a financial interest in the structure during construction should be named on the policy. This typically includes the property owner or developer and the general contractor. Lenders financing the construction may also require that they be listed as additional insureds. The policy should reflect every party's financial exposure in the project.