Builders risk insurance covers a building while it’s being built or renovated. It’s property insurance for the project itself: the structure, the materials waiting to go in and, depending on the policy, materials in transit or in storage off site. It doesn’t include liability.

This page is written for Florida general contractors, developers and trade contractors who buy builders risk or work under someone else’s policy on commercial, multifamily and larger residential projects. If you’re a homeowner or owner-builder working on your own house, our post Builders Risk Insurance for Homeowners and Owner-Builders covers your side of it.

What builders risk covers

There is no single standard builders risk form. Most are written on inland marine forms, usually on an “all risks” basis, which means a cause of loss is covered unless the policy excludes or limits it. In general, a builders risk policy can cover:

  • The structure under construction, from foundation to finish, up to the policy limit
  • Materials and supplies that will become part of the building, on site and often at off-site storage locations and in transit
  • Temporary structures such as scaffolding, forms and construction trailers, when the policy includes them
  • Debris removal after a covered loss, usually up to a stated limit

The limit is generally based on the estimated completed value of the project. Policies are written either on a completed value basis, with the full value insured from the start, or on a reporting basis, where you report values as the work progresses.

Who buys it: the owner or the contractor

The construction contract usually decides who buys builders risk. Some contracts make the owner responsible, others put it on the general contractor and some leave it open. Read the insurance section of the contract before you price the job, not after you sign.

Whoever buys it, several parties have something at stake: the owner, the lender, the general contractor and the subcontractors whose materials and work are part of the building. Things to check:

  • Named insureds. Is your company named, or covered as a contractor or subcontractor under the policy’s definitions?
  • Waiver of subrogation. Many contracts ask the parties to waive claims against each other for losses covered by builders risk. The policy has to allow that waiver.
  • Deductibles. The contract should say who pays the deductible. On a large loss, a percentage deductible can be a big number.
  • Your property on someone else’s policy. If the owner buys the policy, find out whether your materials and the work you’ve installed are covered before the owner accepts them.

Common exclusions and limits

Every policy is different, but these come up often:

Exclusion or limit What to know
Faulty workmanship, design or materials The cost to fix the faulty item itself is generally excluded. Many forms cover resulting damage from a covered cause, such as a fire that starts because of a defect. Some forms offer broader options for design or workmanship.
Flood and earth movement Often excluded or limited by a sublimit. Check whether flood is included, at what limit and with what deductible.
Named storm Often carries a separate deductible, frequently a percentage of the insured values. Read how it’s calculated.
Theft Theft of materials can be covered, but some policies limit theft of materials not yet installed or require site security. Theft by your own employees is commonly excluded.
Contractor’s tools and equipment Generally not covered. That’s what a contractor’s equipment policy is for.
Existing building in a renovation Often not covered unless added. See the renovation section below.
Liability Not covered. Injuries and damage to others’ property fall under general liability.

For more on why general liability won’t pay to redo faulty work, see our guide to the “your work” exclusion.

Florida weather and named storm deductibles

The Atlantic hurricane season runs from June 1 to November 30, and a long project can span more than one season. A few things to plan for:

  • Named storm deductibles. These are separate deductibles that apply when a storm named by the National Weather Service or a similar weather agency causes the damage. They are often a percentage of the insured values rather than a flat dollar amount, and the policy says whether they apply per event, per season or per year.
  • Binding restrictions. Insurance companies commonly stop issuing new coverage or increasing limits in an area while a named storm threatens it. If you need a policy or a change, don’t wait until a storm is in the forecast.
  • Hurricane preparation. Some policies have conditions about securing the site, materials and equipment before a named storm arrives. Know what yours requires, and see our job site hurricane checklist.
  • Water and flood. Wind-driven rain, storm surge and flooding are treated differently. Ask how each is covered.

Soft costs and delay in completion

A covered loss can push back the completion date. Soft costs coverage, when added, can help with extra costs from that delay, such as additional interest on the construction loan, extra architect and engineering fees, permit fees, insurance premiums and lost rental income. These coverages usually have their own limits, waiting periods and definitions. Lenders and owners often ask for them, so check the contract and the loan documents.

Renovation projects

Renovating an existing building raises a different question: what covers the existing structure? Often the owner’s regular property policy continues to cover the existing building, and builders risk covers the new work. Some property policies limit coverage while a building is vacant or under renovation, so the owner should talk with their agent before work starts. Some builders risk forms can cover the existing structure when it’s scheduled. Find out who covers what before you open walls.

When coverage ends

Builders risk is temporary. Depending on the form, coverage often ends at the earliest of a few events: the policy expiration date, the owner accepting the project, the building being occupied or put to its intended use or the owner’s interest ending. Partial occupancy can end coverage on part of a building, so ask whether the policy has a permission to occupy provision. If the job runs long, request an extension before the policy expires.

Trade contractors and installation floaters

If you install equipment or materials, such as HVAC units, electrical gear or windows, the owner’s builders risk may not cover your property until it’s installed or accepted. An installation floater is inland marine coverage for property you’re installing, often written on a form similar to builders risk. Ask us how it fits with your tools and equipment coverage.

Questions to ask before you start

  • Who does the contract require to buy builders risk, and who pays the deductible?
  • Is our company covered as an insured, including our installed work and stored materials?
  • How is the named storm deductible calculated, and how is flood handled?
  • Are soft costs and delay in completion included, and at what limits?
  • On a renovation, what covers the existing building?
  • When does coverage end, and can the owner move in early without ending it?
  • What site security or storm preparation does the policy require?

Frequently asked questions

Does builders risk include liability?

No. Builders risk is property insurance for the project. Injuries and damage to other people’s property are general liability exposures.

Who should buy builders risk, the owner or the contractor?

It depends on the contract. Read the insurance section before you price the job. Whoever buys it, make sure the other parties’ interests are covered and the deductible responsibility is clear.

Does builders risk cover faulty work?

The cost to fix the faulty work itself is generally excluded. Many forms cover resulting damage from a covered cause. Wording varies by policy.

Are my tools covered under the project’s builders risk?

Generally no. Tools and equipment are covered under a contractor’s equipment or inland marine policy.

Can I get builders risk with a hurricane in the forecast?

Often not. Insurance companies commonly restrict new coverage and changes in an area while a named storm threatens it, so arrange coverage well before a storm.

Sources

General information, not legal or coverage advice. Coverage depends on the policy issued, its terms and underwriting. Who buys builders risk depends on the contract you sign.

McGriff-Williams Insurance is an independent insurance agency in Gainesville, in business since 1983 and licensed in Florida. We’re at 3501 W University Ave, Gainesville, FL 32607. Questions: (352) 371-7977, Monday to Friday, 9 a.m. to 5 p.m.

Last updated October 31, 2026