How This Specialized Coverage Protects Against Unforeseen Damages
Presented by Legacy Insurance Group
Construction is a high-risk industry. Whether you’re building a custom home, expanding a commercial facility, or managing a large-scale development, the risks are numerous and often unpredictable. Weather events, theft, vandalism, fires, or structural failures can cause significant financial setbacks. That’s where Builders Risk Insurance becomes essential. At Legacy Insurance Group, we help contractors, developers, property owners, and investors secure the coverage they need to protect their projects from start to finish.
What Is Builders Risk Insurance?
Builders risk insurance—also called course of construction insurance—is a specialized type of property insurance designed to cover buildings and structures while they are under construction or major renovation.
Unlike standard commercial or homeowners insurance, which focuses on completed structures, builders risk policies protect against losses that occur during the construction period.
Who Needs Builders Risk Insurance?
If you’re involved in a construction project, you likely need Builders Risk insurance. This includes:
- General contractors
- Property owners
- Developers
- Architects and engineers (when contractually obligated)
- Subcontractors (especially if materials or tools are on-site)
Depending on the structure of the project, either the contractor, property owner, or developer typically purchases the policy.
What Does Builders Risk Insurance Cover?
Builders risk insurance covers physical loss or damage to the insured structure and materials caused by covered perils during the construction period. Common covered events include:
- Fire
- Theft
- Vandalism
- Lightning
- Wind and hail (sometimes limited based on location)
- Explosion
- Vehicles or aircraft damage
- Collapse
- Materials in transit or stored off-site (optional endorsements may be needed)
The policy typically covers:
- The building under construction
- On-site materials and supplies
- Temporary structures (like scaffolding)
- Construction equipment (with some limitations)
Optional Coverages and Endorsements
You can customize a builders risk policy with endorsements such as:
- Soft costs (e.g., interest on construction loans, architectural fees, legal costs)
- Debris removal
- Delayed opening coverage (for lost revenue or additional expenses caused by construction delays)
- Ordinance and law coverage (to comply with updated building codes)
- Flood or earthquake coverage (often excluded from basic policies)
What’s Not Covered by Builders Risk Insurance?
While builders risk insurance provides broad protection, there are key exclusions to be aware of:
- Workmanship defects
- Wear and tear
- Employee theft
- Mechanical breakdowns
- Acts of war or terrorism (some policies may offer limited coverage)
- Professional liability (separate coverage like Errors & Omissions is needed)
- Injuries on the job site (covered under workers’ comp or general liability)
Understanding what’s excluded helps ensure you have the right mix of policies in place.
Why Builders Risk Insurance Matters: Real-World Scenarios
Scenario 1: Fire at a Job Site
A contractor is building a three-story office building. Halfway through construction, an electrical short causes a fire, damaging the framing and construction materials. Builders risk insurance covers the cost to rebuild the damaged portion and replace the materials, helping the project stay on track.
Scenario 2: Stolen Materials Overnight
A subcontractor leaves copper piping and HVAC units on-site over the weekend. By Monday morning, everything is gone. Without builders risk coverage, the contractor or property owner would eat the cost. With it, those materials are protected.
Scenario 3: Severe Storm Delays Completion
A violent storm blows through Illinois, tearing off newly installed roofing and damaging framing. Builders risk insurance pays to repair the damage, and optional “soft costs” coverage helps cover the interest payments on delayed construction loans.
How Much Does Builders Risk Insurance Cost?
The cost of a builders risk policy depends on several factors:
- Project value
- Location and risk of weather events
- Construction timeline
- Type of structure
- Materials used (e.g., wood vs. steel)
- Scope of coverage (basic vs. comprehensive)
- Claims history
Premiums typically range from 1–4% of the total construction cost. A $500,000 residential build may cost between $5,000–$20,000 for a standard policy, depending on risk factors and coverage options.
Builders Risk Insurance in Illinois: Regional Considerations
Here in Illinois, construction projects face some unique risks, including:
- Extreme seasonal weather: From summer storms to heavy snow and ice, weather damage is a major concern.
- High winds and tornadoes: Especially in rural and suburban areas.
- Theft and vandalism: Construction sites can be easy targets if left unsecured.
At Legacy Insurance Group, we tailor your builders risk policy to reflect these regional exposures—making sure you’re covered not just in theory, but in practice.
Builders risk is just one piece of a comprehensive construction insurance program. Legacy Insurance Group can help you design a package that addresses every angle.
How Legacy Insurance Group Supports Construction Clients
We understand that every construction project is different. That’s why we offer:
- Tailored Policies: Coverage based on your timeline, materials, and project size.
- Risk Assessments: We help you identify potential exposures before they become claims.
- Competitive Quotes: As an independent agency, we shop multiple top-rated carriers.
- Local Expertise: Based in Sugar Grove, IL, we know the local regulations, weather risks, and contractor concerns that matter most.
- Ongoing Support: From quote to claim, our team is here for you every step of the way.
Ready to Protect Your Construction Project?
A successful construction project requires more than hard work—it requires smart protection. Don’t let a single storm, theft, or accident derail months of progress and planning.📞 Call Legacy Insurance Group today or 📞 Contact Us Online to get started with a custom builders risk quote tailored to your project.
