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Commercial Builders Risk Insurance: Cost & Quotes From $11

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A lot of risks lurk around construction projects . A building under construction lacks proper security and can be a target for theft and vandalism. Negligent electrical wiring can trigger a fire; not to mention losses due to natural disasters. All these are hazardous to a construction project and may stall any progress made. It's why building contractors must purchase builders risk insurance as it's the core of any effective risk management program for construction. 

What is Builders Risk Insurance?

Commercial property insurance is underwritten in a way that it only provides coverage to a commercial building that’s already finished and is currently being used.  Carriers never insure ongoing projects through commercial property insurance. Instead, protection is provided with builders' risk insurance. 

Also known as course of construction insurance, a builders risk policy is specialized insurance for protecting building structures under construction, remodeling, or renovation. 

The insurance policy is complex and often misunderstood, but it plays a key role in ensuring a risk-free building project. Understand that builders risk insurance comes in three forms: location-specific, reporting form, and blanket form. 


As the name implies, location-specific builders risk insurance only covers a particular project in a location. For example, if you insured a project in Colorado with location-specific builders risk insurance, then that project will be the only one covered. Other projects, if there are any, aren’t protected.  Location-specific builders risk insurance works for contractors that only take one project at a time. 


Contractors who receive multiple projects are best covered with reporting form or blanket form builders risk insurance. Reporting form or blanket form builders risk insurance cover multiple projects in different locations. Some carriers even allow both to have international coverage, so that what’s covered aren’t only domestic projects but overseas projects too. 


One more thing, builders risk insurance has two types - commercial and residential. Commercial builders risk insurance is for renovation, construction, and remodeling projects involving offices, stores, gyms, sports arenas, and the like. On the other hand, residential builders risk is for projects involving bunkhouses, personal garages, family homes, and so on. 


Is Builders Risk Insurance Only Available by Contractors?

Builders risk insurance is usually purchased by contractors. But note that this is also available for other professions that provide remodeling, construction, and renovation services such as:

  • Real estate developers

  • House flippers

  • Roofers

  • Interior designers

  • Builders




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What Does Builders Risk Insurance Cover?

A basic builders risk policy covers hazards to the building under construction, and equipment, machinery, materials, and supplies. Unlike popular opinion, course of construction policies don't cover on-the-job injuries or accidents. A policyholder of a builders risk insurance can file a claim when damage to the project is incurred because of:

  • Fire

  • Vandalism

  • Equipment theft

  • Vandalism


How about damage resulting from poor workmanship or design? A basic builder's risk doesn’t cover damage resulting from human error, mechanical breakdown, normal wear and tear, rust, and corrosion. To cover these, you need to endorse additional policies.


Some of the commonly covered project components include:

  • Foundation

  • Fixtures

  • Building machinery and equipment

  • Other structures/facilities part of the construction project


Nonetheless, most insurance carriers will not include landscaping , construction trailers , ground transport rigs, scaffolding, satellites and antennas, and theft of supplies and tools. But if any of these components is of value to you, it's possible to include it in your construction risk insurance at increased premiums.


How Much Does Builder's Risk Insurance Cover?

Builders risk insurance companies won’t think twice about insuring a project worth millions of dollars. However, there’s a threshold on how much carriers are willing to cover. For instance, if the project is worth billions, then small-time carriers won’t provide coverage.


Only big insurance companies are willing to provide builders risk insurance to contractors who have billion-dollar projects. An example is Zurich. Zurich offers $1 billion builders risk insurance for customers in good standing.


How Much Money Can You Get from Builders Risk Insurance?

The amount of money you can get from builders risk insurance is equal to the total estimated value of the project. For example, if your project is $1 million, then builders risk insurance can cover you for the same amount. No builders risk insurance offer custom limits, meaning that you can’t decide how much to get on your own.


Is Builders Risk Insurance Required?

Builders risk insurance is not a requirement. However, note that some projects might require you to get builders risk insurance to satisfy the terms.


If you’re the project owner and the contractor doesn’t have coverage, then consider getting builders risk insurance for yourself.


The bottom line is having builders risk insurance is better than not having it. Choose to have this policy even if it seems like you don’t need it right now.


What Other Policies Do You Need Aside from Builders Risk Insurance?

Aside from builders risk insurance, you might also need to purchase other policies such as:

  • Public liability insurance - This policy helps cover costs if an accident occurred and third-parties got injured or had their property damaged

  • Professional liability insurance - Particularly useful if you’re accused of failing to meet deadlines. Also, covers cost if the client accuses you of committing negligence and violation of good faith

  • Workers compensation insurance - Allows you to pay an injured worker's medical bills. Also provides an allowance up until the injured worker is strong enough to go back to work or until a certain threshold is reached

  • Employer’s liability insurance - Helps pay for costs if a workers blames you for a work-related injury, delayed employee benefits, and more

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Builders Risk Insurance Cost

The average cost of builders risk insurance is 1% to 5% of the total construction budget. For instance, if your building project costs a total of $100,000, expect to pay anywhere from $100 or $1,500 a month. If paid annually, then the cost is $1,200 or $18,000.

 

Several factors may affect your builders risk insurance quote. They include:

  • Project's budget - This is a factor that significantly affects the cost of premiums since pricing is based on the percentage of the project’s total value. A builders risk insurance for a $1 million project is more expensive than that of a $500,000 project

  • Location of the job site - Where is the job site located? Is it near the coast? A place where strong winds usually set in? No matter which is which, note that builders risk insurance for projects in high risk locations is expensive 

  • Project timeline - How long will the project be? One year, two years, three years, or longer? Note that builders risk insurance is much cheaper for projects that are quick to complete 

 

To give more insights, here’s a table showing the builders risk insurance price of the top-rated companies:


Monthly Rates Annual Rates Best for
CoverWallet $150 $1,800 Builders risk insurance quotes comparison online
Zurich $163 $1,956 Builders risk insurance for mid-sized construction companies
Progressive $223 $2,676 Builders risk insurance for multiple projects
State Farm $240 $2,880 Builders risk insurance with flexible policies
AIG $267 $3,204 Builders risk insurance with extensive coverage
US Assure $276 $3,312 Builders risk insurance that's easy to claim
Geico $280 $3,360 Builders risk insurance for residential construction projects
USAA $285 $3,420 Builders risk insurance in the form of rental policy
Allstate $290 $3,480 Builders risk insurance with a lot of local agent support available
The Hartford $300 $3,600 Builders risk insurance with interruption coverage

Compare Cheap Builders Risk Insurance Quotes Online

Get all the best quotes from leading providers in a click of a button!

 

Best Builders Risk Insurance Companies

Purchasing home insurance or builders risk insurance can be challenging and confusing. There are many insurance carriers and identifying the right partner for your needs might be a hassle. If you're trying to find the best companies, here are the best construction risk insurance providers:


CoverWallet Builders Risk Insurance


Pros

  • Free and fast builders risk COI

  • Get the cheapest builders risk insurance quotes from different companies and compare

Cons

  • Not an insurance company but a broker selling the policies of its partners


CoverWallet sells the builders risk insurance of its partners. Even if the company doesn’t underwrite its builders risk insurance, everything’s great because easy online policy management and free online certificate of insurance are provided. With its online quote comparison platform, CoverWallet helps the customer get the best coverage at the cheapest rates. 

 

Best for: Builders risk insurance quotes comparison online

Average cost:  $150

Our rating: 10/10



Zurich Builders Risk Insurance


Pros

  • Clients can rate, quote, and manage policies online

  • Available nationwide in 50+ states

  • Direct contact to a dedicated team of experienced underwriters

  • Policies can be insured under the property owner's or contractor's name

Cons

  • There are a lot of coverage details on the company's website, which can be overwhelming


Zurich offers tailored commercial builders policies for mid-sized and large construction totaling up to $75 million in value. With over 25 years in the construction insurance sector, the company boasts a team of professional underwriters, including risk engineering and claims specialists seasoned in the construction sector. Zurich commercial builders risk insurance covers the building structure under progress, onsite materials, equipment. 



Best for: Builders risk insurance for mid-sized construction companies

Average cost: $163

Our rating: 10/10



Progressive Builders Risk Insurance


Pros

  • Customizable quotes are available online

  • Clients can add work-related accidents to their commercial construction insurance

  • Covers wide-ranging construction projects

Cons

  • Policy purchases are only possible through an agent


Progressive commercial is an acclaimed insurer providing a range of policies at affordable rates and unparalleled customer service. Among its insurance products is construction insurance, which protects your commercial building project from unexpected situations and work-related accidents. The company's construction insurance covers several projects, including, home improvement, remodeling, excavation, asphalt laying, concrete laying, roofing, etc. Clients can obtain quotes online with customization opportunities. 


Best for: Builders risk insurance for multiple projects

Average cost: $223

Our rating: 10/10



State Farm Builders Risk Insurance


Pros 

  • Strong financial rating

  • Ranks second among the top builders risk insurance providers for customer satisfaction

Cons

  • Limited details about its policies unless you speak to an agent

 

Established in 1922, State Farm is one of the largest risk coverage providers in the US. It has financial stability, coverage options, and a positive track record among customers. State Farm commercial builders insurance includes equipment failure coverage, building protection, and municipal law protection. Additionally, the insurance carrier ranks among the top carriers with flexible policies, and you can customize each of the policies with support from an agent. 


Best for: Builders risk insurance with flexible policies

Average cost: $240

Our rating: 9/10



AIG Builders Risk Insurance


Pros

  • An in-house team of claims adjusters dedicated to risk coverage

  • Fifty percent payment assurance within 7 days of an approved claim

  • Has a risk management team that helps clients mitigate losses and minimize insurance costs

Cons

  • Clients can only get a builders hazard insurance quote or buy AIG coverage from a broker


AIG is one of the leading providers of construction risk insurance because they are experts and experienced in the construction industry. The company has an excellent reputation among contractors and property managers, thanks to its agents who collaborate with clients to provide personalized policies to meet a project's specific needs. Hence, AIG is a great insurer if you're managing midsize or large construction works requiring extensive coverage.


Best for: Builders risk insurance with extensive coverage

Average cost: $267

Our rating: 8/10



US Assure Builders Risk


Pros

  • A policy can be insured in the property owner's or contractor's name

  • Property insurance products comprise equipment, rentals, and vacant buildings

  • It's easy to file a risk insurance claim. Clients only need to contact the agency where they purchased the coverage

Cons

  • Insurance programs only offered by Zurich


US Assure established its builders risk coverage program in 1977, helping clients achieve success by discovering opportunities and revenue growth. Apart from risk protection, it also provides construction and property insurance. With US Assure, you can get builder risk insurance for projects of any scale and valuation, from new ground-up projects to renovation works and small-scale installation projects. US Assure is the company behind Zurich's on course construction policies.


Best for: Builders risk insurance that's easy to claim

Average cost: $276

Our rating: 7/10



Geico Builders Risk Insurance


Pros

  • Customers can include optional coverage with the help of Geico qualified insurance agents

  • Has a dedicated division exclusively handling construction risk coverages

Cons

  • Products focus majorly on homeowners


Geico specializes in property insurance, including homeowners insurance, renters insurance, landlord insurance, flood and earthquake coverage policies, etc. However, if you want to buy construction risk insurance, you can discuss your special needs with an agent in the company's Commercial Insurance division. Geico construction risk insurance policies cover residential construction projects and damages caused by fire, earthquakes, contractor's negligence, etc. 


Best for: Builders risk insurance for residential construction projects

Average cost: $280

Our rating: 7/10



USAA Builders Risk Insurance


Pros

  • Highly rated for customer service

  • Offers digital claims tools through an app

  • Include replacement costs

Cons

  • A client must be a member or veteran of the US military or a relative of one 

  • No local agents or brokers


USAA was established in 1922 in San Antonio, by 25 military servicemen. The company offers many insurance and financial products, including home insurance, to armed forces personnel and veterans and their families. With over 36,000 employees, 13 million members, and satellite offices across the US, USAA provides commercial builder insurance in the form of a rental policy. That covers any construction risks of a new residential property. 


Best for: Builders risk insurance in the form of rental policy

Average cost: $285

Our rating: 6/10



Allstate Builders Risk Insurance


Pros

  • Local insurance agents available

  • Optional online identity tracking software

Cons

  • More expensive policies than competitors


Allstate also specializes in offering cheap home insurance quotes to residential property owners, although the company provides builders risk policies for a limited timeframe, after which clients can switch to a homeowners policy once the construction is complete. If you're living in a rental home and purchase renters insurance, the policy will include liability coverage for your new construction project, so long as you purchase the company's homeowner's insurance. 


Best for: Builders risk insurance with a lot of local agent support available

Average cost: $290

Our rating: 6/10



The Hartford Builders Risk Insurance


Pros

  • Wide range of policy extensions (such as daily-in-completion and soft expenses) 

  • Clients can use their policy to cover all their construction risk needs

  • Flexible deductible with cost-saving opportunities

  • Clients can get quotes online

Cons

  • Relatively costlier than other carriers

  • Policies only sold by agents

  • Had a lower-than-average score on a customer satisfaction rating in a 2021 US small commercial insurance study by JD Power

  • Builders risk coverage is not available in New Jersey, Hawaii, or Alaska


The Hartford is one of the most authoritative construction industry insurers. It was founded in 1810 and has a strong financial power recognized by carrier review agencies, such as AM Best, S&P, and Moody's. The company offers a wide range of builder risk policies at affordable prices. The Hartford property owner's policies include interruption coverage that covers costs if something halted your project. Besides, you can also include a workers' compensation program, management liability, installation policies, etc. While you can obtain a quote online, only an agent can sell you a policy. 


Best for: Builders risk insurance with interruption coverage

Average cost: $300

Our rating: 6/10



Avoid Guesswork in Purchasing Builders Risk Insurance

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