Buildings are subject to many different risks while under construction. They may catch fire, be damaged by high winds, or fall victim to other perils. Builder’s risk insurance indemnifies against some of these losses.
Builder’s risk covers perils such as fire, wind, theft and vandalism and many more. It typically does not cover perils such as earthquake, flood or wind in beach zones unless the policy has been specifically endorsed to do so.
These policies also do not cover accidents and injuries at the workplace, and it is intended to terminate when the work has been completed and the property is ready for use or occupancy. If you are going to properly setup your policy, coverage should be effective prior to when the materials are delivered to the job site. Coverage ends upon the earlier of closing of the sale, occupancy or the policy expiration date.