What Your Clients Should Know About Builders’ Risk

Construction projects are inherently risky, and builders’ risk is there to cover the potential pitfalls. Although there may be a great pay-off after the completion of a building project, there is a long list of potential risks and problems that could occur during every stage of the construction process. Furthermore, any one of these could lead to costly delays and accidents. 

The right type of insurance can mitigate many of these issues. And one of the most helpful types of insurance that could protect your clients’ interests and investments is builders’ risk.

What is Builders’ Risk?

Builders’ risk coverage is a type of property insurance that covers property damage or loss that may occur during various stages of the construction process. It protects your clients’ investment if something goes wrong during construction, such as bad weather, fire, theft, or vandalism.

Of course, your clients may already have property insurance. But it doesn’t cover construction-related risks. That’s where builders’ risk comes in. This type of insurance covers risks that standard insurance usually doesn’t cover. It is why it’s essential to ensure your clients know this coverage and how it can protect their investment.

What Projects Need Insurance?

Builders’ risk policies cover three types of construction projects:

New Construction is when a building or structure faces construction from the ground up. Likewise, it also includes additions and renovations to an existing structure.

Remodeler’s Risk Projects: These are construction projects that involve an addition or renovation to an existing structure where no new construction occurs. It also includes tearing down a part of a structure and rebuilding it.

Betterment Projects: It is a situation where builders make improvements to an existing structure to increase its value. 

What Does Builders’ Risk Insurance Cover?

Builders’ risk insurance covers buildings under construction. Moreover, it protects against fire, vandalism, and weather damage. Lenders for construction loans typically require this type of insurance.

Its scope also extends beyond the building to include the entire work site. It will cover damages to materials, equipment, and temporary structures. However, this type of insurance does not cover the workers’ personal property or the construction company’s liability.


The builder or developer generally purchases Builders’ Risk Insurance. However, sometimes the property owner can buy this package. The coverage can protect against many risks, such as fire, wind damage, and theft. 

Your clients must understand that the policy will protect them from any damage that may occur during construction. As an insurance broker, you must educate your clients on builders’ risk insurance and help them determine if this coverage suits their needs.

About Snyder Specialty

Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039.