Builder’s risk insurance

A homeowner’s policy may not fully cover a house under major renovation, and a contractor’s general liability policy doesn’t cover damage to the work itself. Builder’s risk fills that gap for the length of the project.

Typical policies cover the structure and the materials on site, and often materials in transit or stored elsewhere, against fire, wind, hail, theft and vandalism. Flood and earthquake are often excluded unless added. Many policies exclude faulty workmanship itself while covering damage that results from it, and your tools and equipment usually need separate coverage.

The contract should say who buys it, the owner or the contractor, and who is named on it. On new construction the builder often buys it; on remodels, the owner’s insurer may extend coverage or require a separate policy. Ask the client to check with their agent before work starts.

A policy runs for a set term and usually ends when the building is occupied or the project is complete, so extend it if the job runs long. Keep receipts for materials delivered to the site; you’ll need them for any claim.