Calculate Builders Risk Insurance Cost and Get a Tailored Builder's Risk Insurance Quote with Lowest Cost Guaranteed.

‍

‍

Get a Tailored Builder's Risk Insurance Quote Now

Get a builder's risk insurance quote anywhere in the world by paying a fee of $500. The lowest builders risk insurance cost is contractually guaranteed for similar protection: if you have legal proof of lower cost, then we pay the difference!

Powered by

‍

The Details of Builders Risk Insurance Coverage

Builders risk insurance coverage, also known as course of construction insurance, safeguards construction projects against property damage, liability risks, and other core project risks. Whether it is for renovations or large-scale constructions, understanding this insurance is crucial for comprehensive project protection and financing.

The insurance typically covers a range of perils, including fire, wind, theft, vandalism, and more. It’s essential to review the fine print of your policy to understand specific inclusions and ensure comprehensive protection for your construction projects.

Here are examples of construction risks that should be protected against through builders risk insurance coverage:

• Damage to buildings, heavy machinery and/or equipment used during construction
• Structural defects incurred during construction
• Environmental damage done due to construction leading to fines, penalties, or other forms of liability
• Other forms of liability that are caused by the construction process

Common exclusions in builders risk insurance coverage include: known circumstances, intentional damage by the insured, fraud by the insured, inherent defects (these are insured through inherent defects insurance) as well as damages resulting from earthquakes, floods, or hurricanes unless specifically endorsed. Additionally, accidents and injuries at the workplace are generally not covered under these policies.

Builders risk insurance coverage typically concludes upon the earliest of the following: completion of the work, the property being ready for use or occupancy, the policy expiration date, or insurer cancellation due to non-payment of premium. It’s crucial to align your policy period with your project timeline to maintain continuous coverage.

Benefits of Builders Risk Insurance Coverage

1. Financial Protection:

Builders risk insurance coverage provides crucial financial protection against unforeseen events that could otherwise result in substantial out-of-pocket expenses. This coverage ensures that construction projects can continue smoothly, even after significant losses.

2. Compliance with Contractual Obligations:

Many construction contracts require builders risk insurance coverage as a mandatory provision. Having this coverage in place ensures compliance with contractual requirements, facilitating smooth business operations and partnerships. Coverage should meet contractual obligations word by word to ensure maximum compliance.

3. Peace of Mind:

Having builders risk insurance coverage allows contractors, developers, and property owners to focus on the successful completion of their projects without constant worry about potential risks and losses.

4. Comprehensive Coverage:

Comprehensive builders risk insurance coverage ensures that nearly all potential risks during construction are accounted for, which can be monetized with lenders and investors. This includes not only physical damage but also soft costs that can accumulate due to project delays.

Builders Risk Insurance Deductible

The builders risk insurance deductible is negotiable and should reflect the risk that the builder faces as well as their financial liquidity.

It must be calculated by independent builders risk insurance consultants as it directly impacts builders risk insurance cost. For instance, doubling a builders risk insurance deductible from $50k to $100k could have a 5%+ impact on builders risk insurance cost.

Builders Risk Insurance Claims & Litigation

It is important to understand and clinically navigate the commercial insurance claims process with the help of independent experts when faced with a loss that can be covered by builders risk insurance.

For moe information and examples around construction insurance coverage including recent court rulings, visit the Associated General Contractors of America.

Builders Risk Insurance Coverage Scenarios

Builders risk insurance coverage varies by project type:

• High-Rise Construction: Requires higher limits for vertical exposures.
• Renovation & Retrofit: May need “existing structure” endorsement.
• Civil & Infrastructure: Coverage for heavy equipment and site work.
• Spec Homes: Shorter-term policies with fast-track bind options.

Customize builders risk insurance coverage with our world leading builders risk insurance coverage designer.

How Tailored Builders Risk Insurance Coverage Boosts Financing & Valuations

Many lenders and investors require proof of robust builders risk insurance coverage before releasing funds. A competitive builder's risk insurance quote combined with tailored endorsements:

• Reduces lender holdbacks on draw requests or leads to more competitive financing rates and covenants.
• Enhances project valuations by mitigating contingency reserves and/or incorporating lower investment risk into discount rates and multipels.
• Improves IRR by minimizing unplanned capital outflows due to delays or losses. Refer to our private equity insurance page illustrating how IRR is impacted mathematically.

The Details of a Builders Risk Insurance Policy

The image below shows the construct of a Builders Risk Insurance Policy, which is made up of operational coverage (95%) and legal coverage (5%). The point is that going to court to enforce builders risk insurance coverage defeats the purpose of buying the policy, so you want to make sure that whatever policy you buy protects your business right, based on operational data, and pays out fast on large losses. The same concept applies to any builders risk endorsement.

It is important to note that the fine print of each policy is designed differently by each insurer (learn more about the design of business insurance). It is therefore important to review, edit, and trigger the language of any builder's risk policy clinically vis a vis the operational risk of the business.

Construction Risks covered by a Builders Risk Insurance Policy

1.    Physical Loss or Damage:

• Fire and Lightning: Protection against fire damage and lightning strikes.
• Windstorms and Hail: Coverage for damage caused by severe weather conditions.
• Theft and Vandalism: Protection against loss due to theft or vandalism of materials and equipment.
• Explosion: Coverage for damages caused by explosions on the construction site.

2.    Natural Disasters:

• Floods: Coverage for damage due to flooding, although this may require a separate endorsement.
• Earthquakes: Coverage for earthquake damage, which also may need a specific endorsement depending on the location and risk level.

3.    Other Risks:

• Collapse: Protection against accidental structural collapse during construction.
• Debris Removal: Coverage for the cost of removing debris following a covered loss.
• Soft Costs: Coverage for additional expenses such as architectural fees, legal costs, and interest on construction loans that may arise due to a delay caused by a covered loss.

Important Items of a Builders Risk Insurance Policy

1. Policy Duration:

Builders risk insurance coverage is typically written for the duration of the construction project. It’s important to ensure that the policy period aligns with the expected project timeline, including any potential delays.

2. Coverage Limits:

It’s crucial to accurately estimate the total value of the project, including materials and labor, to determine appropriate builders risk insurance coverage limits. Underestimating the project value can result in inadequate coverage and significant financial exposure.

3. Exclusions:

Understanding the exclusions of builders risk insurance coverage is essential. Common exclusions might include:

• Mechanical breakdowns
• Employee theft
• War and terrorism

4. Deductibles:

Builder’s risk policies often come with various deductible options. Choosing a higher deductible can lower builders risk insurance cost but also increases out-of-pocket costs in the event of a claim. Balancing these factors according to the project’s risk tolerance is important.

5. Endorsements and Extensions:

Depending on the specific needs of the construction project, an additional builders risk endorsement and extensions may be required. These could include:

• Earthquake and flood coverage
• Coverage for temporary structures
• Coverage extensions for tools and equipment off-site

The Details of a Builders Risk Endorsement

A tailored Builders Risk Endorsement is a crucial addition to your builders risk insurance coverage, offering extra and tailored protection for your projects pre, during, and post development. Such endorsement can cover unforeseen events such as theft, vandalism, or weather-related damage during the building process, ensuring that your construction site and materials are protected.

A tailored builders risk endorsement is especially valuable for contractors and property owners who want comprehensive coverage tailored to their specific project needs. By adding a Builders Risk Endorsement that is tailored to your operations, you can safeguard your investment, avoid costly delays, and ensure your project stays on track, providing peace of mind throughout the construction process. This can also assist with achieving better financing with lenders and better valuations with investors.

For instance, if there are specific types of cranes or construction equipment used within your project, their values can be insured more appropriately through a tailored builders risk endorsement. The same applies for any other loss scenarios unique to your project, whether it is safeguarding against business interruption due to high end technology being used, delays in performance or client payments, etc.

Standard policies can be enhanced via builders risk endorsement options such as the following:

• Soft Costs Coverage: Pays architectural, legal, and financing fees if delayed.
• Delay in Completion: Compensates lost rental or sales income due to covered perils.
• Testing & Commissioning: Protects machinery during trial runs.
• Earthquake & Flood: Adds natural catastrophe protection.
• Pollutant Liability: Covers cleanup if hazardous materials contaminate the site.

‍Contact us today to tailor your builders risk endorsement at the lowest cost which we can contractually guarantee. We analyze and structure the fine print of any Builders Risk Endorsement for best compliance and protection, and can trigger the endorsement in case of loss including negotiating with loss adjusters representing the insurer, all while minimizing your builders risk insurance cost.

Broadly Breaking Down Builders Risk Insurance Cost

Get a builders risk insurance cost estimate instantly with our world-leading builders risk insurance cost calculator. You can also instantly request builders risk insurance coverage based on your budget and goals, where our team contractually guarantees the lowest builders risk insurance cost for similar protection tailored to your goals.

Builders Risk Insurance Cost is made up of the following broad components:

• Risk Premium associated with the Builder's Risk
• Broker Commission
• Admin Fees charged by the Insurer
• Cost of Capital minimum premium (non-risk related)

It is therefore important to tackle each component to minimize builders risk insurance cost while maximizing compliance and enhancing operational protection.

What Factors Determine Your Builders Risk Insurance Cost?

Your builders risk insurance cost depends on key factors:

• Project Size & Value: Larger contracts result in higher premiums.
• Location & Exposure: Coastal, flood-prone, or high-crime zones carry surcharges.
• Construction Type: Wood-frame buildings often cost more to insure than concrete structures.
• Completion Percentage: Policies often adjust premium pro-rata based on percent complete at binder date.
• Deductible Selection: Higher deductibles lower upfront cost but increase out-of-pocket risk.
• Capital Markets: the status of capital markets impact insurer pricing.
• Other factors: various other factors impact the ultimate builders risk insurance cost you pay.

Get a Builder's Risk Insurance Quote today that includes a contractual guarantee on lowest builders risk insurance cost for similar protection: if you have proof of lower cost, we pay the difference!

Who Pays for Builders Risk Insurance?

Either the developer or the general contractor is typically the one who pays for builders risk insurance depending on project size, complexity, and the agreement between both parties.

Under AIA and ConsensusDocs, most projects assign the cost of builders risk insurance coverage to the owner, who then requires subcontractor indemnity. Always confirm who pays for builders risk insurance in your agreement to avoid surprises.

In many instances however, a sub-contractor is the one who pays for builders risk insurance. That said, it is best for the party who pays for builders risk insurance to be most invested in the construction project’s completion. This can include the property owner, general contractor, or developer. In most cases, the responsibility is outlined in the construction contract, which specifies who pays for builders risk insurance as well as who is liable for insuring the project against risks like fire, theft, or weather damage during construction.

The type of builders risk insurance coverage can be a factor in who pays for builders risk insurance. For example, for more comprehensive coverage that includes professional liability insurance, the developer should pay for the insurance in order to be the primary named insured on the policy in case of errors or omissions from the part of the General Contractor or sub-contractors.

A property owner often chooses to be the one who pays for builders risk insurance for the sake of being in charge of protecting their investment, while a contractor may choose to be the one who pays builders risk insurance to ensure coverage for their tools, equipment, and materials on-site.

The individual or party who pays for builders risk insurance will also dictate the ultimate builders risk insurance cost paid, which can be negotiated as part of the overall project budget, with premiums varying based on factors like project size, location, and duration. Understanding who pays for builders risk insurance is crucial for ensuring clear accountability and avoiding coverage gaps.

How to Get a Builder’s Risk Insurance Quote

Securing a builder’s risk insurance quote is simple when you follow these five steps:

1. Define Your Project Value – Provide the total completed value, including materials and labor.
2. Specify Construction Timeline – From groundbreaking through final inspections.
3. Detail Materials & Methods – Include wood framing, steel structure, or specialty finishes.
4. Choose Desired Limits & Deductibles – Balance premium vs. out-of-pocket risk.
5. Submit to Carriers – Compare multiple builder’s risk insurance quotes to find the best rate and coverage.

Get a Builder's Risk Insurance Quote today that includes a contractual guarantee on lowest builders risk insurance cost for similar protection: if you have proof of lower cost, we pay the difference!

Builders Risk Insurance Cost Estimate Calculator

Use our interactive Builders Risk Insurance Cost Estimate tool to see real-time premium ranges based on your project’s value and duration. Enter your construction budget and timeline to generate an instant builders risk insurance cost estimate, so you can budget accurately before you bind coverage.

Note that a quick builders risk insurance cost estimate may be not representative of your actual premium as there are various factors to consider including the breadth of coverage you are seeking.

About Construction Insurance and Bonding

Construction insurance and bonding are essential for protecting your business and ensuring project success. Construction insurance covers key risks such as property damage, liability, and workers’ compensation, while bonding guarantees project completion and compliance with contractual obligations. Learn more about surety bonds and surety bond financing.

Construction insurance should also include directors and officers insurance coverage, whether it is provided through an extension or endorsement of a construction insurance policy or through a stand-alone policy. This is to protect Management and the Board as well as the company itself in case of liability due to the mismanagement of construction operations.

Whether you’re a contractor or a project owner, understanding the importance of construction insurance and bonding can help safeguard your investments and build trust with clients. Get the right coverage and bonding solutions to protect your business, reduce risks, and enhance credibility in the construction industry.

What are Construction Insurance Costs

While it is recommended to budget 1-1.5% of the protection amount, the cost of construction insurance depends on various factors, including the size of your business, the scope of your projects, and the specific risks involved.

Use our calculator above to get an instant quote of your construction insurance cost. You can also get the coverage instantly based on the estimated cost of the construction insurance calculator or based on any budget and goals.

Testimonials: Minimizing Builders Risk Insurance Cost

“By comparing and editing multiple builder’s risk insurance quotes with DeshCap, we reduced our premium by 25% and added delay-in-completion coverage—saving our NYC high-rise project over $125,000.”

— Project Manager, Skyline Developers

You can access more testimonials on our team's results for other clients in different industries and jurisdictions. Also check out our 5-star Google ratings!

Case Studies: Minimizing Builders Risk Insurance Cost

While our team services real estate and construction industries in various countries, you can refer to this builders risk insurance case study about a construction company in Bahrain that had difficulties with receiving payments on time, which adversely impacted its financing.

Builders Risk Insurance Cost and Coverage FAQs

Q1: How much is builders risk insurance for a $2M project?

Premiums typically range from 0.1–0.3% of project value, so around $2,000–$6,000.

Q2: Can I adjust builders risk insurance coverage mid-project?

Yes—an effective builders risk endorsement lets you increase limits or add perils or make edits as work progresses.

Q3: What’s included in a builders risk insurance cost estimate?

Material value, labor costs, project length, location, deductible level are factored in alongside other variables.

Q4: When Is Builders Risk Insurance Required?

The insurance is required when there is a contractual obligation for the contractor or the builder performing the work to carry Builder's Risk Insurance. For example, a client mandating that a contractor carry insurance naming the client as additional insured. Another example is that of a landlord requiring insurance upon their tenants who then turn to contractors for renovations and requiring them to carry the insurance so that the tenants are not at fault with their landlord obligations. Depending on the jurisdiction, Builder's Risk Insurance is also required when an industry body or regulatory body requires it by law.

Q5: Where To Get Builders Risk Insurance?

Get it instantly above or contact us for any queries. We make sure the insurance is structured based on your goals and budget, which includes auditing the fine print of the builder's risk policy to fit your needs as well as triggering the insurance for you at loss on your behalf (note that brokers are not involved in claims).

You will also reduce builders risk insurance cost by having us assist you with the procurement process as we contractually guarantee the lowest cost for similar protection.

Q6: Who are the Builders Risk Insurance Providers?

Insurance providers for Builders Risk Insurance include global insurance companies such as AIG, Chubb, Zurich, etc. as well as local insurers. Most insurers with expertise in property and commercial liability insurance should be able to underwrite and provide Builders Risk Insurance.

Q7: Is Builder's Risk Insurance the same across Geographies?

The Builders Risk insurance policy is different from one insurer to another and across different jurisdictions and geographies. Make sure to hire independent insurance experts, such as our team, who can guide you through coverage in your jurisdiction or geography. Builder's risk insurance in a specific geography must be tailored to compliance standards as well as physical risks tied to that geography.

Q8: Does the BOQ need to match the Sum Insured for Builders Risk Insurance?

In Builders Risk Insurance, the Bill of Quantities (BOQ) does not have to match exactly the Sum Insured, but it is good practice for them to be aligned and defensible. Here’s how the two relate:

✅ BOQ vs. Sum Insured – What’s the Difference for the sake of a Builder Risk Insurance Policy?

• BOQ (Bill of Quantities):
  • A detailed breakdown of construction components and costs.
  • Used by quantity surveyors, contractors, and project managers for pricing and budgeting.
• Sum Insured:
  • The maximum amount the insurer will pay in the event of a total loss.
  • Should reflect the total replacement cost of the project, including:
    • Materials and labor
    • Soft costs (e.g., design fees, permits)
    • Escalation and inflation contingencies
    • Temporary works
    • Demolition/removal of debris

• 🧩 Why They Don’t Need to Match Exactly
  
  • BOQs often omit‍
    
    • Soft costs
    • Escalation
    • Temporary works or contingency allowances
    • Insurers may use the BOQ as a reference document, but they will expect:
      
      • An uplift to reflect total replacement value‍
      • A defensible rationale behind the Sum Insured

• 🔍 Best Practice:
  
  Start with the BOQ as a baseline then add line items accordingly to arrive at the Builder Risk Insurance Sum Insured.

‍Getting Quotes from Builders Risk Brokers

1. Compare Multiple Quotes:

It’s beneficial to compare quotes from multiple insurers to ensure that you are getting the best coverage at a competitive price. Brokers can facilitate this process by leveraging their relationships with various insurance carriers.

2. Understand the Policy Terms:

Carefully review the terms and conditions of the policy to understand the scope of coverage, exclusions, and claim procedures. Clear understanding of the policy helps avoid surprises in the event of a claim.

3. Ensure Continuous Coverage:

Since construction projects can often face delays, it’s crucial to ensure that the builder’s risk insurance policy remains active until the project is completed and ownership is transferred. This might involve extending the policy period if necessary.

Why Involve Independent Builders Risk Experts?

1. Enhanced Risk Management:

Risk experts bring a systematic and proactive approach to risk management, identifying potential issues before they escalate into significant problems. This proactive stance helps in reducing the overall risk exposure of the construction project.

2. Comprehensive Coverage:

By working with risk and independent insurance experts, businesses can ensure that their builder’s risk insurance policies are comprehensive and tailored to their specific needs. This customization minimizes the chances of coverage gaps and enhances overall protection.

3. Cost Efficiency:

Effective risk management can lead to significant cost savings. By mitigating risks and preventing losses, risk experts help keep insurance premiums in check and reduce the likelihood of costly claims.

4. Improved Safety and Compliance:

Risk experts ensure that safety protocols and regulatory requirements are met, reducing the risk of accidents and legal issues. This compliance not only protects workers but also enhances the reputation of the construction company.

5. Peace of Mind:

Knowing that a team of experts is actively managing potential risks provides peace of mind to project managers, investors, and other stakeholders. This confidence allows them to focus on core construction activities without constant worry about unforeseen risks.

Impact of Builder Insurance on Construction Projects

Key impacts that can be monetized with lenders through better financing terms, or with investors through better valuations, include:

1. Project Continuity:

With risk experts actively managing potential hazards through builder insurance, construction projects are less likely to experience significant disruptions. This continuity ensures that projects stay on schedule and within budget.

2. Financial Stability:

Effective risk management translates to fewer unexpected expenses and better financial stability for construction projects. This stability is crucial for maintaining investor confidence and securing future projects.

3. Reputation Enhancement:

Construction companies that prioritize risk management including builder insurance tend to build a strong reputation in the industry. This reputation can lead to more business opportunities and a competitive edge in the market.

The involvement of construction risk experts, such as our team, in builder insurance provides a strategic advantage by ensuring comprehensive coverage, enhancing safety, and promoting financial stability. Their thorough understanding of all-risk insurance positions them strongly as trusted advisors to the construction industry.