What Is Builder’s Risk Insurance?

Jun 20, 2022

Builder’s Risk insurance can seem similar to other types of policies. Find out how this coverage is different and why it’s just as important.

As someone taking on a new construction or undergoing a major renovation, you likely know about Builder’s Risk insurance. But how exactly does it differ from a Trades and Contractors policy?

Below, the NEXUS team explains:

  • What Builder’s Risk covers and who it’s for
  • What this type of insurance doesn’t cover
  • How it’s different from other risk coverage
  • Why it’s important for any construction project
  • How you can get covered today

Need Builder’s Risk

Contact Us

What Does Builder’s Risk Insurance Cover?

This type of insurance, which is also known as Course of Construction, covers any structure while it’s being built. This can include both new projects and pre-existing buildings that are undergoing renovations.

A policy like this typically offers project-specific Property Coverage and Premises Liability. For example, NEXUS’s Builder’s Risk insurance includes both of these coverages with limits up to $2M for new constructions and renovations.

Course of Construction insurance usually also includes the following coverage types:

  • Rental Value
  • Additional Living Expenses
  • Change Order Coverage
  • Equipment Breakdown
  • Sewer Backup, Flood, and Earthquake

With Builder’s Risk insurance, your project materials, supplies, and equipment (both onsite and in transit) will often be covered if damaged by:

  • Fire
  • Explosion
  • Vandalism
  • Theft
  • Weather
  • Vehicles or aircrafts

When property damages cause delays, insurance can also help cover the loss of any sales, rental income, real estate taxes, or interest on loans.

All construction jobs are unique, which is why each policy will look different. If your site requires additional coverage, you can often extend your policy to include items like scaffolding, debris removal, and temporary structures.

What Doesn’t Builder’s Risk Insurance Cover?

Although this type of policy is important to have in place for your protection, you’ll also want to check with your insurance company to understand what’s not included.

Typically, the below would be excluded from your coverage:

  • Acts of war
  • Contract penalty
  • Employee theft
  • Engineers
  • Government action
  • Poor design, materials, or craftsmanship
  • Voluntary partings

Who Is Builder’s Risk Insurance For?

This policy can be bought by the building owner, a general contractor, or a construction manager. Regardless of who purchases the policy, however, you may want to consider including the following individuals in the coverage:

  • Property owner
  • General contractor
  • Construction manager
  • Subcontractors
  • Lenders

RelatedBuilder risk insurance cost

How Is It Different from Trades and Contractors Insurance?

While both Builder’s Risk and Trades and Contractors Insurance provide coverage for job sites, they operate in very different ways.

The coverage from a Builder’s Risk policy typically protects the property under construction and the materials and equipment used for that project. Without it, there may be a gap in coverage for the structure. Coverage is usually in place from the beginning of a project until it has been completed.

Trades and Contractors, on the other hand, is a package policy that allows a service provider to build custom coverage for their unique business needs. The commercial general liability coverage included in a policy like this can help protect trades professionals in the event of an accident that causes injury to a client or damage to the property.

Looking for Builder’s Risk Insurance for Your Project?

Finding the right insurance policy for your project can feel overwhelming and, at times, confusing.

Designed for residential and light commercial buildings with wood frame constructions, NEXUS’s Builder’s Risk insurance offers a policy period up to 24 months and allows backdating up to 14 days.

NEXUS Has You Covered

Get the protection you need with custom Builder’s Risk Insurance from NEXUS.

Contact Us

Share this article on social media

Recent Articles

Landlords, do your tenants have personal insurance?

Are you a Landlord? Do you know WHY your tenants should have Renter’s insurance? Your Liability exposure is one reason. If your tenant has insurance, their liability claims will go to them first. Otherwise, they go to you and your insurance. Which can raise your rates...

Coquitlam Crunch Challenge & The Community Diversity Fund

The Coquitlam Crunch Challenge, has been brought back after its two-year break! This year’s event was a huge success, with the biggest turnout that this event has ever seen! For those unfamiliar with The Coquitlam Crunch Challenge, it is an uphill running community...

Additional Living Expense Coverage

Read in full Let’s talk about addition living expenses or loss of use coverage and how it affects you in a claim. “Additional Living Expenses.” This is where most people find they are underinsured. It pays for all the extra expenses you incur when you cannot live in...

Condo Strata’s Water Deductible

Read in full Congratulations! You just bought a condo or maybe a townhouse. Do you know what type of insurance you require? There is Important information you need to review and consider about condo or townhouse insurance. The Strata has insurance for the building...


  • 2023 (1)
  • 2022 (37)
  • 2021 (15)