Builders Risk Insurance

Builders risk insurance (sometimes called course of construction insurance) is a specialized property policy that covers a building while it's under construction or renovation. It protects the structure itself, plus materials, fixtures, and equipment on site, in transit, or in temporary storage, against losses like fire, theft, vandalism, wind, and hail. Once the project is complete, coverage typically ends and a standard homeowners or commercial property policy takes over.

Anyone with a financial stake in a construction project can benefit—homeowners building a new home or funding a major renovation, general contractors, custom home builders, and property investors. In many cases, your construction loan lender will require a builders risk policy before releasing funds. The policy can be purchased by the property owner or the contractor, but it's important that everyone with an insurable interest is named on the policy.

Generally, no. Most homeowners policies aren't designed to cover a home under construction, and major renovations can create coverage gaps in an existing policy. A vacant home being remodeled may even have coverage restricted or voided. Builders risk insurance fills that gap by covering the structure and materials during the construction phase, then a standard homeowners policy takes over once the project is complete and the home is occupied.

A builders risk policy covers the structure under construction along with building materials, supplies, and fixtures on the job site, in transit, or in temporary storage. Covered perils typically include fire, lightning, wind, hail, theft, and vandalism. Many policies can be extended to cover soft costs like additional loan interest, permit fees, and architect fees if a covered loss delays your project, plus debris removal and scaffolding.

Builders risk policies typically exclude faulty workmanship, design errors, wear and tear, mechanical breakdown, and employee theft. Flood and earthquake are usually excluded but can often be added by endorsement. Builders risk also doesn't cover liability—if a visitor is injured on the job site, that falls under general liability insurance. Tools and equipment owned by contractors usually need a separate inland marine policy. We can help you review the exclusions and build a package that closes those gaps.

Most builders risk policies are written in 3, 6, or 12-month terms to match your expected construction timeline. If your project runs long—which happens more often than not—most carriers allow you to extend the policy, though it's best to request the extension before the original term expires. Coverage typically ends when the project is complete, the building is occupied, or the policy expires, whichever comes first.

Purchase your policy before construction begins—ideally before any materials are delivered to the job site. Coverage can't be applied retroactively, so a loss that happens before the policy is in force won't be covered. If your project is financed, your lender will likely require proof of builders risk coverage before closing on the construction loan.

Yes. Builders risk policies can be written for new ground-up construction or for renovation and remodeling projects. For renovations, the policy can cover the new work and materials, and in some cases the existing structure as well. This is especially important for major remodels, since renovation work can create gaps in a standard homeowners or commercial property policy.

As an independent agency, MBG Insurance isn't tied to a single carrier. We shop more than 20 top-rated insurance companies to find the right builders risk coverage for your project at a competitive rate. With offices in Springfield, MO, Oak Grove, MO, and Bentonville, AR, we know the local construction market across Missouri, Arkansas, and Kansas—and you'll always talk to a live person in our office, not a call center. Call us or request a quote online before your project breaks ground.