Business
Builder's Risk Insurance
Published September 24, 2026 · Last updated October 1, 2026
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The short answer
Builder's risk insurance covers a building while it's being built or remodeled. It covers the structure and the materials, on site, in storage, or on the way. It pays for things like fire, theft of materials, vandalism, and some weather damage.
Small businesses pay about $105 a month for it, according to Insureon. Policies often cost 1% to 4% of the finished project's value. Coverage usually ends when the project is done.
Thimble is a participating provider that offers builder's risk coverageSponsored online for small businesses.
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What does builder's risk insurance cover?
Builder's risk is a type of property insurance for a project under construction. It's also called course of construction insurance. It usually covers:
- The building in progress. The frame, walls, roof, and anything already installed.
- Materials on site. Lumber, drywall, fixtures, and supplies waiting to go in.
- Materials in storage or in transit. Supplies stored somewhere else or on a truck headed to the job.
- Debris removal after a covered loss.
Common causes of loss include fire, theft, vandalism, wind, hail, and lightning.
What it usually doesn't cover
Forms vary, so read yours. Many policies exclude or limit:
- Flood and earthquake. These often need to be added separately.
- Faulty work or design. The cost to redo bad work itself is often excluded, though damage it causes may be covered.
- Wear and tear.
- Injuries on the job site. That's general liability for other people and workers' comp for your crew.
- Your tools and equipment. Those need a tools policy, usually inland marine.
How much does builder's risk insurance cost?
Price range
Small businesses pay about $105 a month on average, or about $1,259 a year. Yearly premiums range from about $350 to more than $7,000. Many policies cost 1% to 4% of the finished project's value.
Not a quote or an offer. Your price comes from the insurance company. Source: Insureon, 2026 (based on its small business customers).
What moves the number
- The project's finished value. The policy limit is usually the value of the completed building.
- How it's built. The type of building and materials matter. Wood frame often costs more to cover than masonry.
- Where it is. Areas with more storms or theft cost more.
- How long it takes. Longer projects mean more time at risk.
- Broad or named coverage. A policy that covers all causes except those it excludes costs more than one that covers only listed causes.
- Your deductible.
Who should buy builder's risk?
Anyone with money in the project can buy it. That includes:
- General contractors and builders
- Property owners and developers
- Homeowners building a new home or doing a major remodel
The contract should say who buys the policy. If the owner buys it, contractors often ask to be named on it too. Settle this before work starts, so there's no gap and no double coverage.
Remodeling your home? Check your homeowners policy
A homeowners policy is built for a finished, lived-in home. A major remodel or a new build may not be fully covered, especially if the home is empty during the work. Call your insurance company before the project starts. Ask whether you need a builder's risk policy or a change to your current policy.
See homeowners insurance.
When does coverage start and end?
Coverage usually starts before materials arrive at the site and ends when the project is complete. The policy is written for the expected length of the job, with a set end date.
Projects often run late. Under most policies, the insurer doesn't have to extend the term, and the price for more time isn't guaranteed. Ask whether you can lock in an extension and its rate when you buy.
What to ask before you choose
- "Is the limit based on the finished value of the project?"
- "Does it cover materials in storage and in transit?"
- "Are flood and earthquake covered, or do I need to add them?"
- "Can I lock in an extension, and its price, in case the project runs late?"
- "Can the owner, contractor, and subcontractors all be named on the policy?"
The catch: builder's risk ends when the project ends. The day the building is finished, you need regular property insurance, like commercial property or homeowners insurance. Line it up in advance so there's no gap.
Keep reading
Building for clients? See contractor insurance and surety bonds. Paying for a remodel? Compare a home equity loan.
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