Why this question isn't automatic
Unlike general liability, which every contractor is expected to carry on their own, builders risk is often purchased once for the entire project by a single party — typically whoever the construction lender or contract designates — rather than separately by every contractor involved.
Assuming someone else on the project already has it in place, without confirming who and to what limit, is a common and expensive gap.
The case for the owner or developer purchasing it
When the owner or developer buys builders risk, coverage typically stays consistent regardless of GC or subcontractor turnover, and the owner controls the policy terms directly rather than relying on a GC's choice of carrier and limits.
This is common on larger or more complex projects where the owner has more at stake financially and wants direct control over the coverage terms.
The case for the GC purchasing it
When the GC purchases builders risk, it's often bundled with their existing carrier relationships and can be more straightforward to administer on a single, GC-managed project, especially smaller or residential builds where the GC is the primary point of contact throughout.
This is more common on smaller projects where a single GC manages the build from start to finish without multiple owner-side stakeholders.
What actually needs to be confirmed either way
Whoever purchases it, confirm the policy names all the parties who need coverage (owner, GC, and often the lender), confirm the coverage term actually spans the full expected construction timeline with room for delays, and confirm what happens if construction runs longer than the policy term.
This should be settled and documented before construction starts — discovering a gap mid-project, after a loss, is the worst possible time to learn the coverage wasn't actually in place as assumed.
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Frequently asked questions
7 questions — start typing to filter
Who typically buys builders risk insurance?
It varies — sometimes the owner or developer, sometimes the GC, typically designated by the construction lender or the project contract. It should be confirmed explicitly, not assumed.
What happens if nobody purchased builders risk?
The structure has no coverage for damage during construction — this is a serious, avoidable gap that should be confirmed and closed before construction begins.
Does builders risk need to name the lender as well as the owner?
Often yes — construction lenders commonly require being named on the policy as a condition of the loan; confirm the specific requirement.
What happens if construction runs longer than the builders risk policy term?
Coverage can lapse right when the project is still exposed — confirm the extension process and build in a buffer rather than assuming the original term will be sufficient.
Can more than one party be named on the same builders risk policy?
Yes — it's common for the owner, GC and lender to all be named insureds or loss payees on the same policy, which is often cleaner than each party carrying separate, potentially conflicting coverage.
Does builders risk cover materials stored off-site before delivery?
Sometimes, with a specific off-site or transit endorsement — standard builders risk often only covers materials once they're at the job site, so confirm this explicitly if materials will be staged elsewhere.
What happens to builders risk coverage once the building is occupied?
Builders risk coverage typically ends at substantial completion or occupancy, whichever the policy defines first — a permanent property policy needs to be in place before that transition, not after.