Builder’s risk insurance is a policy designed to provide coverage for buildings while they are under construction. It covers the contractor’s interest in materials at the job site before they are installed, materials in transit intended for the job, and the value of the property being constructed until it is completed and accepted by the owner. The policy may be written to cover the whole structure for new construction or the cost of remodeling and renovation projects. It can also be used to cover specific projects, such as a new room addition, a deck or a remodeled bathroom.
Builder’s risk insurance is usually in the name of the contractor or the property developer, but it could also be in the name of the property owner, if he is responsible for insuring it while the property is under construction. Both commercial and residential construction sites might be covered under a builder’s risk insurance policy.
A builder’s risk insurance policy is essential for people who have a financial interest in property construction, either commercial or residential. It isn’t just for new construction, but also any remodeling or renovation project.
If any damage to construction material occurs in transit or during storage, then this cost could also be covered under a builder’s risk insurance policy.