Builders Risk

Builder’s Risk Insurance

Builder’s Risk Insurance is a form of insurance that covers a building under construction. The policy may cover the structure alone or also the construction materials waiting to be transported to the site. The policy covers damages up to the coverage limit, which reflects the total value of the structure, excluding land value.

Builder’s Risk Insurance Coverage

The policy covers damages to the insured structure from fire, wind, lightning, theft, vandalism, explosion, hail, vehicles or aircraft. There is limited coverage for collapse. Some of the standard exclusions include:

  • Water damage
  • Earthquake
  • Weather damage
  • Employee theft
  • War
  • Contract penalty
  • Government action
  • Mechanical breakdown
  • Voluntary parting

Besides, damages resulting from faulty planning, materials, design, and workmanship are completely excluded from the coverage.  The insureds include the ultimate
owner, contractor performing the work, lending institution.

Builder’s risk insurance is a coverage protecting insurable interest of an individual or organization in fixtures, materials, or equipment being used in the construction of a building in the event of physical damage or loss from a covered cause.

Common builder’s risk insurance coverage includes

  • Scaffolding
  • Property in transit
  • Debris removal
  • Property in temporary storage
  • Fire department service charge
  • Valuable papers, including site blueprints, plans
  • Sewer and Drain Backup

Important Facts of Builders Risk Insurance

  • Builder’s risk insurance does not cover the property of others, accidents on the site,
  • Tools or equipment are not covered
  • Sub-contractors must have their own insurance
  • Coverage ends on completion of the building


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Aaron J. Farmer Insurance Agency, Inc.
7960 Silverton Ave. Ste. 202 San Diego, CA 92126
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