Builder’s risk insurance only applies to certain projects, but if it does apply, it’s important to have. This type of insurance covers damage to buildings while they’re under construction, such as in the case of natural disaster. This helps you recoup money for your lost materials and time.
Builder’s risk insurance is important for construction companies or contractors who:
Work on long-term construction projects.
Store expensive materials and supplies at the work site.
Comply with local building codes.
Have contract requirements.
Unlike standard property insurance, which covers materials that are kept at your place of business, builder’s risk insurance covers damages and loss at the work site itself. If you’re working on a structure or building that will take over a day to complete, builder’s risk insurance covers your supplies, equipment, materials and time until it’s completed and your client signs off on it.