Builder's risk insurance is a special type of property insurance which indemnifies against damage to buildings while they are under construction. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials, fixtures and/or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from a covered cause.
Most Builders and Contractors will want to have this coverage and most lenders and/or homeowners will require it. Builder's risk insurance covers against elemental hazards such as wind, rain, hail, snow, fire as well as theft of building materials and vandalism.
Builder's risk insurance generally becomes in force when the project starts and concludes after a certain term or after completion of the project. Generally, a Builder's Risk insurance can be converted into Homeowners insurance or Vacant Property insurance once the construction has completed.