The short answer
Builders risk insurance covers the structure and materials during construction or major renovation, from groundbreaking to completion. It sits alongside the contractor's own liability, equipment and subcontractor arrangements, and the contract often decides who buys which. A licensed broker reads the contract and the project details to match each piece, and to arrange proof for owners and lenders.
- Owners building a new home or commercial building
- General contractors and builders who must carry cover to win work
- Renovators taking on a major project that opens up walls, roofs or structures
- Developers whose lender requires cover during construction
- Trades who subcontract and need to understand what the main contractor requires
2 licensed brokers in the network handle this. In Alberta, Canada, a request for construction and builders risk insurance can be offered to up to three of them, chosen because they are licensed for this line and place. They are test brokers while we are in demo.
See the brokers → Outside Alberta, Canada you can prepare and save a request today; sending opens place by place. Brokers answer with their own quotes. Broker.insure does not quote, advise or take commission.
01 / What it covers
The parts worth understanding
Builders risk
Physical loss to the work in progress and materials on site, typically from fire, wind or theft. The policy usually ends when the project is complete or the building is occupied.
Contractor's general liability
Claims from injury to others or damage to neighbouring property because of the work. Owners and lenders commonly want to be named on it.
Tools and equipment
Cover for the contractor's own tools, trailers and machinery, on site and in transit. Often excluded from builders risk and arranged separately.
Subcontractor risk
How the policy treats subcontractors, and whether the main contractor requires their certificates. Uninsured subs are a common source of trouble.
Delay and soft costs
Costs of a late opening caused by a covered loss, such as extra interest or lost rent. An optional extension for some projects.
Professional and design errors
Claims that a design, plan or specification was faulty. This is a distinct cover for designers and design-build contractors rather than part of builders risk.
02 / Get ready
Bring this, and expect these questions
Gather
- The construction contract, including the insurance and indemnity clauses
- Project address, type of building and the planned start and completion dates
- Total value of the work, including owner-supplied materials
- Description of the construction method and any work on existing structures
- Where materials are stored, including off-site and in transit
- Names of the general contractor and each major subcontractor, and their insurance certificates
- Lender requirements for named parties and policy wording
- The contractor's own history on similar projects and any past claims
- Site security measures such as fencing, cameras and night checks
A broker will ask
- Who is responsible under the contract for arranging builders risk: owner or contractor?
- What is the full value of the project, and does it include materials supplied by the owner?
- Is this new construction or work on an existing structure?
- When does it start, when will it finish, and what happens if it runs late?
- Which subcontractors work on site, and do they carry their own liability cover?
- Is there work near water, heat, excavation or demolition that adds risk?
- How is the site secured outside working hours?
- Who needs to be named on the policy, and what wording have they asked for?
Not sure of an answer? Leave it. "Not known yet" is a fine answer, and a broker will help you fill it in.
03 / Build your request
Answer a few questions. Get your own list.
Pick what fits. Your answers shape the list beside them, and they are saved to your request as plain facts a broker can read. "Not sure yet" is always a fine answer.
04 / Three situations
See which one sounds like yours
A family building a custom home
A couple has hired a builder and a lender to finance the project. The lender needs proof of cover before releasing the first payment, and the couple has not worked out who in the contract is buying what.
First steps. Hand the broker the construction contract and the lender's requirements before the first draw. Ask whether the owner or builder should hold the policy, and what happens to the cover when the family moves in before every detail is finished.
A renovator opening up the roof of an older building
The project removes the existing roof over a mixed-use building while tenants stay below. A storm during the open-roof period is the owner's main worry, and the existing property policy may say little about work in progress.
First steps. Tell the broker plainly that the roof will be open and for how long, and ask how weather and water damage during the work are treated. Check with the current property insurer in writing about how construction affects the existing policy.
A small general contractor bidding on a bigger job
Until now the contractor has done residential decks and additions. A commercial client has asked for proof of cover, a list of subcontractors and an indemnity clause the contractor has never seen.
First steps. Send the bid package to the broker before submitting the bid. Ask how liability limits and subcontractor requirements differ for commercial work, and have a lawyer review the indemnity clause, since insurance wording alone cannot settle a contractual obligation.
05 / Words you will hear
The jargon, in plain words
- Builders risk
- Temporary property cover for a structure while it is being built, including materials on site. It usually ends when the project is finished or occupied.
- Completed operations
- Protection for claims that arise after a job is done, such as a defect that later causes damage or injury. It matters long after the crew has left.
- Soft costs
- Expenses beyond bricks and labour that a delay can add, such as extra loan interest, permits and design fees. They can be covered if arranged in advance.
- Substantial completion
- The point at which a project is ready for its intended use. It often decides when builders risk ends and who becomes responsible for insuring the building.
- Subcontractor certificates
- Proof that each trade working on your project carries its own liability cover. Without them, a trade claim can land on the party who hired them.
06 / Common mistakes
What trips people up
- Assuming the contractor's policy covers the building under construction when the contract says otherwise.
- Letting builders risk end before the building is actually protected by a normal property policy.
- Skipping subcontractor certificates and then finding no cover when a sub's worker is hurt.
- Leaving out owner-supplied materials, or the value of changes added during the build.
- Forgetting storage off-site or in transit, where materials are often most exposed.
- Not revisiting the policy when a project runs late or its scope changes.
Ready when you are
Turn this into one clear request.
Save it, add what you know, and choose when to send it. A licensed broker who handles construction and builders risk insurance takes it from there.
07 / Questions people ask
Straight answers
What is builders risk insurance?
It is property cover for a building while it is being built or substantially renovated, protecting the structure and materials from losses like fire, wind, theft or vandalism. It is usually written for the length of the project and ends at completion or occupancy. The exclusions, such as for faulty workmanship, vary, so read them with your broker.
Who pays for builders risk insurance, the owner or the contractor?
The construction contract usually decides, and it can go either way. Some owners buy it directly; some require the general contractor to. Lenders often insist on being named. Because the answer sits in the contract wording, bring it to your broker rather than assuming, and settle the question before work begins.
When does builders risk coverage end?
Typically when construction is complete, when the building is accepted by the owner, or when it is occupied or put into use, depending on the wording. Because buildings are often occupied before every detail is finished, ask your broker how the end date is defined and arrange a normal property policy to take over without a gap.
Do contractors need liability insurance as well as builders risk?
Generally yes, because they protect different things. Builders risk covers the work and materials; contractor's liability responds when someone else is injured or their property is damaged. Clients, municipalities and lenders often require proof of both, so ask your broker how to present them together.
What does builders risk not cover?
Common exclusions include the contractor's own tools and equipment, faulty workmanship or design, normal wear, and some water, ground movement or earthquake events. Some can be added back and others are covered under different policies. Ask your broker to walk through the exclusions on the actual form for your project.
Do subcontractors need their own insurance?
Most main contractors and project owners require it, since a sub's mistakes or injuries can otherwise fall back on the main contractor. Ask each sub for a current certificate of insurance and check the dates. Your broker can advise what to request from subs in your trade and province.
General information, not insurance advice. Broker.insure is a directory and request service: it is not an insurer and does not quote, bind or advise. Policy terms, availability and what is required where you live depend on your situation and on licensed professionals. Updated 2026-10-31.