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Builder’s Risk Insurance​​

Protect Your Construction Project While It Is Being Built

A building under construction faces risks that are very different from those of a completed and occupied property.

Whether you are building a new home, constructing a commercial property or completing a major renovation, Builder’s Risk Insurance can help protect qualifying property during the construction process.

At Next Move Insurance, we help Texas builders, investors, property owners and contractors explore Builder’s Risk coverage for qualifying projects.

What Is Builder’s Risk Insurance?

Builder’s Risk is a specialized type of property insurance designed for buildings and materials during construction, renovation or installation.

Texas insurance rules describe builder’s risk and installation-risk policies as coverage for physical damage to machinery, equipment, building materials or supplies being used during building, renovation, repair or installation projects.

Coverage can potentially apply while materials are:

  • At the construction site

  • Awaiting installation

  • Temporarily stored

  • In transit

  • Being used in construction

Exact coverage depends on the policy.

Who Might Need Builder’s Risk Insurance?

Builder’s Risk may be appropriate for:

  • Property owners

  • Home builders

  • General contractors

  • Developers

  • Real estate investors

  • House flippers

  • Commercial developers

  • Lenders

  • Contractors with an insurable interest in a project

The party responsible for purchasing the policy can depend on the construction contract and financing arrangements.

What Types of Projects Can Builder’s Risk Cover?

Depending on the insurer and policy, coverage may be available for:

New Residential Construction

Homes being built from the ground up.

Commercial Construction

Offices, retail spaces, warehouses and other commercial buildings.

Major Renovations

Properties undergoing significant remodeling or rehabilitation.

Investment Properties

Projects being renovated for resale or rental.

Additions

Qualifying additions or major improvements to existing structures.

What Types of Losses May Be Covered?

Depending on the policy, covered causes of loss may include events such as:

  • Fire

  • Wind

  • Hail

  • Theft

  • Vandalism

  • Certain storm losses

  • Other covered causes of physical damage

Coverage, deductibles and exclusions vary.

What May Not Be Covered?

Builder’s Risk is not the same as general liability insurance.

A Builder’s Risk policy may not automatically cover:

  • Employee injuries

  • Contractor liability

  • Professional mistakes

  • Faulty workmanship

  • Certain equipment

  • Vehicles

  • Flood

  • Earth movement

  • Other excluded causes of loss

Additional insurance may be needed depending on the project.

Builder’s Risk vs. General Liability

These policies solve different problems.

Builder’s Risk

Primarily protects the construction project and qualifying property from covered physical damage.

General Liability

Primarily addresses certain claims involving bodily injury or property damage caused to others.

Many construction businesses may need both.

Builder’s Risk for Real Estate Investors

Buying a distressed property to renovate?

Tell your insurance agent what you actually plan to do with the property.

A traditional homeowners or landlord policy may not be appropriate for a property undergoing extensive construction.

Builder’s Risk may be worth considering when you are:

  • Flipping a property

  • Completing a major remodel

  • Rebuilding after significant damage

  • Adding substantial square footage

  • Performing structural renovation

  • Converting the property's use

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When Should Builder’s Risk Coverage Start?

Ideally, coverage should be addressed before construction begins or materials are delivered to the project.

Do not wait until work is already underway to begin thinking about insurance.

Texas rules recognize builder’s risk coverage during building, renovating and repairing activity, including certain building materials and supplies associated with the project.

When Does Builder’s Risk Coverage End?

Builder’s Risk is temporary coverage.

Depending on the policy, coverage may end when:

  • Construction is completed

  • The project is accepted

  • The building becomes occupied

  • The property is sold

  • The policy expires

  • Another specified event occurs

You should arrange the permanent insurance before Builder’s Risk coverage ends.

Building Along the Texas Coast?

Construction in coastal areas can involve additional insurance considerations.

Depending on the property's location, you may also need to consider:

  • Windstorm requirements

  • TWIA eligibility

  • Windstorm certification

  • Flood insurance

  • Building-code requirements

Talk to us before construction begins.

Builder’s Risk for Lenders

A construction lender may require Builder’s Risk coverage as a condition of financing.

If you are using:

  • Construction financing

  • Hard-money lending

  • Investor financing

  • Commercial financing

send us the lender's insurance requirements when requesting your quote.

What Information Do We Need?

To begin exploring Builder’s Risk coverage, we may ask for:

  • Project address

  • Property owner

  • Contractor information

  • Type of construction

  • Estimated completed value

  • Current value

  • Construction budget

  • Start date

  • Expected completion date

  • Scope of work

  • Square footage

  • Whether the property is currently occupied

  • Prior losses

  • Financing information

The carrier may request additional information.

Builder’s Risk FAQ

What is Builder’s Risk Insurance?

It is temporary property insurance designed for buildings, materials and qualifying property during construction or major renovation.

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Do I need Builder’s Risk if I am flipping a house?

Possibly. If the project involves substantial renovation, tell us the scope of work so we can explore the appropriate insurance options.

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Is Builder’s Risk the same as homeowners insurance?

No. It is designed specifically for construction-related property exposures.

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Does Builder’s Risk include general liability?

Not necessarily. General liability is typically a separate consideration.

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Can a property owner buy Builder’s Risk?

Yes, depending on the project and insurer.

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Can a contractor buy it?

A contractor may have an insurable interest and may be able to obtain coverage depending on the circumstances.

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Does Builder’s Risk cover renovations?

It can, depending on the scope of the project and the policy.

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Does it cover flood?

Flood may be excluded or require separate coverage. Review the specific policy.

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When should I purchase it?

Ideally before construction begins or building materials are placed at the project.

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Building Something?

Protect It Before Construction Starts.

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Whether you're constructing a new home, renovating an investment property or developing a commercial project, Next Move Insurance can help you explore Builder’s Risk coverage.

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