What Is Builders Risk Insurance?
Builders risk insurance — also called course of construction insurance — is a specialized property insurance policy that covers a building or structure while it is under construction. Standard commercial property policies cover completed, occupied buildings. They do not cover buildings that are under construction, undergoing major renovation, or being built from the ground up. Builders risk fills this critical gap.
GLS Insurance provides builders risk insurance for general contractors, developers, property owners, and specialty contractors across all 17 states in our territory. Whether you are building a new commercial structure in Texas, renovating a historic building in Tennessee, constructing a new church campus in Missouri, or completing a residential development in Florida or North Carolina, GLS Insurance can place builders risk coverage for your project.
What Does Builders Risk Insurance Cover?
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The Building Structure Under Construction — Covers the building itself, including all permanent fixtures, materials, and equipment to be incorporated into the structure.
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Building Materials On-Site — Covers materials stored at the construction site awaiting installation, including lumber, drywall, roofing materials, plumbing and electrical components, and HVAC equipment.
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Temporary Structures — Many policies cover scaffolding, temporary offices, and other temporary structures at the job site.
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Soft Costs — When a covered loss delays project completion, soft costs coverage pays for additional architectural fees, engineering fees, permit re-application costs, and financing costs caused by the delay.
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Business Income / Rental Income Loss — For owner-occupied or investment properties, covers lost income during the delay in occupancy caused by a covered loss.
What Builders Risk Does NOT Cover
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Contractors’ Tools and Equipment — Covered under an inland marine / equipment floater policy, not builders risk.
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Worker Injuries — Covered under workers’ compensation.
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Liability for Third-Party Injuries — Covered under general liability.
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Normal Wear and Tear or Faulty Workmanship — Most builders risk policies exclude losses caused by defective workmanship or design error.
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Earthquake and Flood — Typically excluded and require separate endorsements or standalone policies.
Builders Risk Insurance Across Construction Markets
Construction activity and the specific builders risk market environment vary across GLS Insurance’s 17-state territory. Texas, Florida, Tennessee, and North Carolina are among the fastest-growing construction markets in the country, with significant new commercial and residential development activity. The Midwest states — Missouri, Illinois, Indiana, and Kansas — have active commercial renovation and industrial construction markets. GLS Insurance has access to builders risk markets that write projects of all sizes across all 17 states.
Builders Risk Insurance FAQ
Who purchases builders risk insurance — the contractor or the property owner?
Either can purchase builders risk, and the construction contract typically specifies who is responsible. Property owners building or renovating their own buildings often purchase builders risk directly. On contractor-managed projects, the general contractor may purchase builders risk as part of the project budget. GLS Insurance advises both contractors and property owners on the appropriate structure for their specific project.
How long does builders risk coverage last?
Builders risk policies are typically written for the expected duration of the construction project — commonly 6, 12, or 24 months. If the project is delayed, most policies can be extended. Coverage typically ends when the building is occupied, when the certificate of occupancy is issued, or when the project is completed and accepted by the owner.
Does builders risk cover theft of materials from the job site?
Yes, theft of building materials at the job site is typically covered under builders risk insurance. This is a significant exposure on larger projects where valuable materials like copper wire, HVAC equipment, and plumbing fixtures are frequently targeted. Make sure theft coverage is specifically included in your policy — some policies require a separate endorsement.
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