Understanding Builder’s Risk for Residential vs. Commercial Projects
Builder’s Risk Insurance is one of those essential yet often misunderstood policies in construction. Whether you’re building a single-family home or managing a multi-story commercial development, Builder’s Risk plays a vital role in protecting your project — but the coverage details can differ more than you think.
What Is Builder’s Risk Insurance?
Builder’s Risk (also known as Course of Construction insurance) covers property and materials during construction. It protects against losses from fire, theft, vandalism, certain weather events, and other unforeseen damage to the structure while it’s being built or renovated.
Residential Projects: Protection for Smaller Builds
When you’re constructing or remodeling a home, Builder’s Risk insurance helps protect your investment until the property is move-in ready.
Typical coverage includes:
Damage to the home structure or materials on-site.
Theft of building materials and fixtures.
Certain weather-related damage (depending on your policy and location).
Residential coverage is usually shorter-term — often lasting three to twelve months — and tends to be simpler to underwrite since the risk exposure is smaller and more predictable.
Commercial Projects: More Complexity, More Risk
Commercial Builder’s Risk Insurance is designed for larger, more complex projects — think office buildings, retail centers, or apartment complexes.
These policies often include:
Broader coverage for specialized equipment, scaffolding, or temporary structures.
Options for “soft costs” like lost income, financing interest, or architectural fees if the project is delayed.
Higher limits to match the larger scale of financial exposure.
Because of the size and complexity of commercial construction, these policies require more detailed underwriting and often involve multiple stakeholders — general contractors, developers, and lenders.
Key Takeaway
While both types of Builder’s Risk Insurance share the same purpose — protecting what’s under construction — the coverage scope, limits, and complexity can differ significantly.
For homebuilders: Focus on straightforward, short-term protection.
For commercial developers: Consider policy customization for equipment, delays, and financing protection.
If you’re planning a new build or renovation, it’s smart to consult an experienced insurance advisor who can tailor a policy to your project’s needs and budget.
👉 Not sure which Builder’s Risk policy fits your project?
Talk to the experts at RISE Insurance — we’ll help you find the right coverage so your construction stays protected from the ground up.
📞 423-541-1111
🌐 www.riseins.com
📧 info@riseins.com
