Builders risk insurance protects the contractor against what?

Builders risk insurance is designed specifically to protect a contractor against any loss or damage to the project while it is being constructed. This type of insurance covers the physical structure during construction against perils such as fire, vandalism, theft, and certain natural disasters. It addresses risks associated with the building itself until it is completed and ready for occupancy.

The focus of builders risk insurance is on the construction project rather than the tools or equipment used or liability claims that may arise after the project completion. While injury claims on site and tool loss are significant considerations for contractors, these are typically covered under different types of insurance policies, such as general liability insurance or tools and equipment coverage. This specialization makes builders risk insurance an essential component of construction risk management, ensuring that financial losses due to damage to the building itself are mitigated.