What Builder’s Risk Insurance Coverage Includes and What It Doesn’t

Builder’s risk insurance coverage is one of those things contractors don’t think about until it’s too late. We’ve seen firsthand how easy it is to assume your organization is protected, only to find out your business insurance policy doesn’t cover the kind of damage you just experienced. That’s why understanding the coverage and the exclusions of your builder’s risk policy is critical to protecting your project and your profit.

Whether you’re an HVAC technician staging rooftop units, a plumber storing expensive fixtures onsite, or a flooring installer halfway through a tenant build-out, knowing where builder’s risk coverage starts and stops could save you thousands. Here’s what every artisan contractor needs to know.

What Does Builder’s Risk Insurance Coverage Typically Include?

Builder’s risk insurance coverage protects buildings and structures while being built, renovated, or improved. Think of it as temporary property insurance during the active construction phase. A standard policy generally includes:

Damage to buildings or structures under construction
Materials, fixtures, and supplies onsite or in transit
Temporary structures (like scaffolding or fencing)
Debris removal and cleanup after a covered loss
Fire, theft, vandalism, wind, and weather damage

Imagine you’re a small electrical contractor installing wiring for a new medical office. You’ve staged thousands of dollars in materials onsite. Overnight, a fire breaks out due to a nearby tenant’s space heater. With builder’s risk coverage, you’re reimbursed for the lost materials and can get back on schedule without eating the loss.

It’s worth noting that each policy is customizable, and what’s covered depends on how it’s written. Bly Insurance Group helps artisan contractors and small construction businesses tailor plans to match the scope of work, timelines, and value of the materials involved.

Use this helpful artisan contractor insurance checklist to ensure you choose coverage that protects you from the real risks you face.

Check the Checklist

Where Coverage Ends: Common Exclusions in a Builder’s Risk Policy

While builder’s risk coverage is broad, it doesn’t cover everything. The most common exclusions often catch business owners off guard, especially during a claim.

Some of the most common exclusions include:

Employee injuries (covered under workers’ comp)
General liability for third-party injuries or property damage
Contractor tools or equipment (covered by inland marine/equipment floater policies)
Faulty workmanship or design errors
Normal wear and tear
Damage after project completion or occupancy

Think of a landscaping contractor who finishes 90% of a project when high winds scatter sod and irrigation materials. Coverage applies. But if that same contractor returns two weeks later to repair a client-caused issue and leaves a trencher overnight that gets stolen? That loss likely isn’t covered because the project is considered complete, and the equipment wasn’t covered under builder’s risk.

Understanding these limits is essential. Bly Insurance Group walks clients through real-world examples so they know exactly what risks they’re carrying and how to manage them.

Find the coverage you need to protect your contracting business by exploring Bly Insurance’s customizable coverage options that we tailor to safeguard you from the risks you face.

Our Contractor Coverages

Builder’s Risk Insurance for Contractors Isn’t One-Size-Fits-All

Builder’s risk insurance is often misunderstood, even among seasoned pros. Many artisan contractors assume the general contractor or developer covers it, while others think they’re too small to need it.

But if you’re supplying materials, managing subcontractors, or acting as the point person for a particular scope of work, you may be on the hook when losses happen. That’s why having customized risk insurance for contractors can be critical.

Common Questions We Help Clients Answer:

Are you listed as a named insured on the GC’s policy?
Are your materials covered while in transit or awaiting install?
Does your scope require temporary structures or staging areas?
Are you liable for delays caused by damage?

At Bly Insurance, we don’t assume, we verify. We’ll review your project scope, ask the right questions, and ensure your builder’s risk policy reflects your exposure.

Artisan Contractor Insurance Should Match the Way You Work

Builder’s risk coverage isn’t just for big firms; it’s just as crucial for artisan contractor insurance plans tailored to electricians, plumbers, flooring installers, and more.

Let’s say you’re a cleaning contractor tasked with post-construction cleanup. You’re working inside a nearly finished office building. A sprinkler system malfunctions and floods two floors. Builder’s risk may cover the structural and materials damage, but unless your cleaning equipment is named or protected under your commercial policy, you’ll be out the cost of your gear.

Contractors who skip this coverage often do so because of assumptions:

“The GC has it covered.”
“I’m just a subcontractor.”
“It’s only a small job.”

But if your name isn’t on the policy or if the policy doesn’t apply to your specific risks, you could be absorbing losses you can’t afford.

That’s why Bly Insurance Group customizes artisan contractor insurance policies that include builder’s risk when needed and leave it off when it’s not. You’ll always know what’s protected.

Coverage Gaps You Can Close with Endorsements

A builder’s risk policy can (and should) be customized. Endorsements, also called riders, can expand your protection to close gaps that might otherwise leave you at risk.

Some of the most common builder’s risk endorsements include:

Soft costs coverage for design fees, legal expenses, and loan interest due to delays
Flood or earthquake coverage in high-risk areas
Installation floater to protect materials during delivery and staging
Testing coverage for equipment like HVAC systems being commissioned
Expediting expenses to speed up repair or replacement after a claim

For example, if you’re an HVAC specialist installing rooftop units that require startup testing and one of the units gets damaged mid-test due to a voltage issue, you’re likely not covered unless you’ve added a testing endorsement.

That’s where we come in. Bly Insurance takes a proactive, consultative approach, helping you build a smarter policy that works in the real world, not just on paper.

Uncover the top 5 artisan contractor insurance risks and how to protect your business from them in this helpful and insightful article.

Discover the Risks

Who’s Responsible for Securing Coverage?

This depends on the project contract. In some cases, the property owner or developer handles it. In others, the responsibility falls on the general contractor or construction manager. But subcontractors and specialty trades should always ask:

Am I covered under the existing builder’s risk policy?
Do I need to carry my own?
Am I liable for losses to materials or labor I provide?

At Bly Insurance Group, we help contractors clarify their contractual obligations and eliminate guesswork. If the policy doesn’t protect your business with appropriate coverage limits and types, we’ll help you build one that does.

Let’s Build the Right Protection for Your Next Project

Every project is different. Every contractor is, too. Your insurance shouldn’t be boilerplate.

That’s why Bly Insurance Group offers:

Honest, knowledgeable guidance on when you do and don’t need builder’s risk coverage
Flexible policy structures for project-based or ongoing work
Endorsement options that fill real-world gaps
Support in navigating contracts, requirements, and risk exposure

Get in touch with Bly Insurance Group to explore your builder’s risk insurance coverage options. We’ll help you understand exclusions, fill coverage gaps, and put together a customized policy that protects your materials, labor, and bottom line. Whether you’re gearing up for a small installation or leading a major renovation, we’ve got your back so you can focus on getting the job done.

What Builder’s Risk Insurance Coverage Includes and What It Doesn’t

What Does Builder’s Risk Insurance Coverage Typically Include?

Where Coverage Ends: Common Exclusions in a Builder’s Risk Policy

Builder’s Risk Insurance for Contractors Isn’t One-Size-Fits-All

Common Questions We Help Clients Answer:

Artisan Contractor Insurance Should Match the Way You Work

Coverage Gaps You Can Close with Endorsements

Who’s Responsible for Securing Coverage?

Let’s Build the Right Protection for Your Next Project

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