What It Covers During Construction

• The structure itself as it's being built, including foundation work already completed
• Building materials on site, in transit, or temporarily stored off-site
• Fixtures and equipment that will become part of the finished structure
• Certain soft costs like additional financing expenses if the project is delayed by a covered loss

Coverage generally ends once the project is complete and occupied or sold, at which point the property needs to transition to a standard commercial or homeowners property policy.

Who Actually Needs to Buy It

Depending on the project, builders risk is bought by the general contractor, the property owner, or sometimes required by the lender financing the construction. Because only one policy typically insures the entire project, it's important that everyone with a financial stake (owner, contractor, and often subcontractors) is named or has confirmed coverage exists, rather than assuming someone else in the chain has already bought it.

Why Gaps Here Are Especially Costly

A partially built structure is arguably at its most vulnerable: no finished roof, unsecured openings, materials staged on site, and often no one on the premises overnight. A fire or theft loss mid-project without builders risk coverage doesn't just mean an uninsured loss, it can also trigger loan covenant defaults if the lender required the coverage as a condition of financing. Coverage should be confirmed active before the first materials or equipment arrive on site, not after construction is underway.