Open plan kitchen

What Does Builder’s Risk Insurance Cover

Understanding what builder’s risk insurance covers is important before undertaking a construction project with any significant amount of money invested into it. There are various risks involved in this type of work, some of which cannot be foreseen at all. Having adequate insurance means that you won’t be out of a large sum of money in the event that something goes wrong.

What does builder’s risk insurance cover?

loft room with staircase entrance

Builder’s risk insurance is intended to cover most types of property damage that can impact a construction project which aren’t caused directly by the builders themselves.

This includes

  • environmental damage
  • weather damage
  • theft
  • vandalism

Some builder’s risk insurance policies may vary in their exact coverage. It’s important to take a deeper look at the contract before going for a specific policy. It’s possible that a better deal might be available, depending on what exactly you’re looking to cover and what types of risks are involved in the project.

This should not be confused with public liability insurance, which covers damage done by your construction workers to surrounding properties. Both are important, but they are two separate policies. It’s also important to note that public liability insurance is something builders themselves are responsible for, which is not the case with builder’s risk insurance.

There’s also a difference in duration. Builder’s risk insurance is taken out for specific projects, unlike public liability insurance which is an ongoing insurance policy taken out by construction workers and contractors.

hallway with straight staircase

Who should get builder’s risk insurance?

Builder’s risk insurance does not necessarily need to be taken out by the contracting company. It can also be taken by the property owner, the architect involved in the project, as well as anyone else with a financial interest in the project.

This can include lenders and subcontractors as well. It’s not a problem if multiple builder’s risk insurance policies are present for a single project. The important thing is that there is at least one and that it has extensive enough coverage to address anything that could come up in the course of the construction work.


Clara Annesley

Clara Annesley is an interior design and construction content writer. She holds a BSc (Hons) in Architectural Design Technology from the University of West London. Clara specialises in residential construction for topics like health & safety, architectural design and writing cost guides for renovation and remodelling projects.