Builders Risk Insurance
Also known as Course of Construction (COC) Insurance
Coverage for the building while it’s still half-built — because a lot can go wrong between groundbreaking and grand opening.
Builders risk is the temporary policy that protects a project while it’s under construction or renovation — the structure itself, plus the materials and fixtures waiting to be installed — against fire, wind, theft, and vandalism before anyone’s moved in. A jobsite fire before drywall, a midnight raid on the copper and HVAC units staged for tomorrow: this is what makes the project whole and keeps it on schedule. It runs for the build and then bows out, handing off to a permanent property policy at completion. It won’t cover injuries (general liability) or your tools and equipment (contractors equipment), and getting the right party named and the limit set to the full completed value is where we come in.
Reviewed for accuracy by Mark Hutchings, Licensed Insurance Producer (NV #3600994).
Who needs Builders Risk?
- General contractors building new structures or running major renovations, especially when the construction contract puts them on the hook for the work until handover.
- Property owners and developers funding ground-up construction or substantial remodels, including commercial real estate developers across the Reno, Las Vegas, and California markets.
- Anyone whose lender or construction loan agreement requires proof of course-of-construction coverage before releasing draws — a common condition on financed projects.
- Owners taking on significant renovations, additions, or tenant improvements, where both the existing structure and the new work face construction-phase exposure.
- Parties named in a contract as responsible for insuring the project — the AIA or owner-contractor agreement usually dictates who buys the policy and whose interests have to be listed.
What it covers
- The building or structure itself while it’s under construction or renovation, including the work completed to date.
- Building materials, supplies, fixtures, and equipment meant to become a permanent part of the project — whether on site, in transit, or in temporary storage (coverage terms vary).
- Direct physical loss from covered perils such as fire, lightning, wind, hail, vandalism, theft, and certain water damage, depending on the form.
- Soft costs and lost income tied to a covered delay — things like additional loan interest, lost rental income, real estate taxes, and re-issued permit or design fees, when you add this coverage.
- Debris removal and, by endorsement, expenses like scaffolding, temporary structures, and the cost of removing and replacing undamaged property to reach damaged work.
- Optional extensions for things like pollutant cleanup, fire-department service charges, or ordinance-and-law upgrades, subject to sub-limits and the policy form you choose.
What it doesn’t cover
- Third-party bodily injury or property damage claims (someone hurt on the jobsite, damage to a neighbor’s property) — that’s covered by general liability insurance.
- The contractor’s own tools, machinery, and mobile equipment used to do the work — that belongs on a contractors equipment / inland marine policy.
- The finished, completed, or occupied building once the project wraps and coverage ends — that transitions to a commercial property policy.
- Faulty workmanship, design errors, or defective materials themselves (and often the resulting damage) — design-related exposure is handled by professional liability / errors & omissions, and defect coverage is typically excluded or sharply limited.
- Injuries to your own workers on the job — those are handled by workers’ compensation insurance.
- Construction vehicles, owned trucks, and licensed autos used in the operation — covered under a commercial auto policy.
Real claim scenarios
Jobsite fire before drywall
A partially framed apartment building in Sparks catches fire from a faulty temporary heater overnight. Builders risk responds to the cost of rebuilding the damaged framing and replacing the lumber and materials already installed, getting the project back on schedule.
Overnight material theft
Crews show up at a Reno commercial buildout to find the copper wiring, HVAC units, and appliances staged for installation stolen from the locked site. The policy covers the value of the materials intended for the structure, subject to the deductible and any theft sub-limit.
Windstorm delay and lost rents
A high wind event damages the roof of a nearly complete California retail center, pushing the opening back two months. With soft-cost/delay coverage in place, the policy reimburses the developer for the additional loan interest and lost rental income caused by the covered delay.
Scenarios are illustrative; actual coverage depends on your policy terms.
How it’s priced
Builders risk premiums are usually based on the total completed value of the project — the full cost to build, including materials and labor but typically excluding the land — rather than on a standard annual rate. Because the policy is temporary, term length and the nature of the work drive cost as much as the dollar value does. Expect carriers to weigh:
- Total completed value of the project and the structure type (wood-frame typically rates higher than masonry or steel because of fire risk).
- Project length and scope — new ground-up construction versus renovation of an existing, occupied structure, which carry different exposures.
- Location and catastrophe exposure, including wildfire risk in parts of Nevada and California, wind, and seismic considerations.
- Jobsite security and theft controls — fencing, lighting, cameras, and how materials are stored.
- Your deductible, and whether you add soft costs, delay/lost-income, or transit and storage extensions.
- The loss history of the contractor or developer and the experience of the parties running the build.
What to watch out for
- The term has an end date. Coverage typically lapses at completion, occupancy, or a set number of days — confirm the trigger and line up the permanent commercial property policy before builders risk expires, so there’s no gap.
- Insure to the full completed value. Underinsuring the project value can trigger coinsurance penalties and leave you short at claim time, so update the limit if the scope or budget grows.
- Soft costs and delay coverage are usually optional. If a covered loss could cost you rents, loan interest, or fees, ask for these to be added — they’re often not in the base form.
- Faulty workmanship is commonly excluded. Know exactly how your form treats defects and the resulting damage, because this is a frequent source of denied claims.
- Get the named insureds and lender right. Lenders, owners, and contractors with an insurable interest generally need to be properly listed — a missing party can complicate a claim or a loan draw.
Builders Risk FAQs
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