What Does A Builder Insurance Policy Cover In Construction?

Anyone looking to do construction on a property needs to find a builder insurance policy. Builder insurance policies are designed to protect buildings and structures that are currently under construction. As the owner of a construction company, getting insurance for your under construction projects is of paramount importance. Many business owners like yourself assume that finding construction financing is the most crucial task. While it is important, so is getting the proper coverage. Whether you are constructing an entirely new building or adding on to an existing structure, builder insurance in a must-have. However, before you buy a policy, you need to know what damages are covered. Read on to find out what builder insurance covers.


So long as a building is properly protected against the elements, most damage caused by weather is covered by builder insurance. This includes rain, hail, and even lightning. However, there are a few caveats. If your structure is left unprotected in the open, any damage that occurs due to weather will not be covered. Of course, it is up to the insurance company to determine what constitutes proper protection on a case by case basis. Also, the policy does not cover damage resulting from flooding. So long as you can cover your structure and equipment properly, a builder insurance policy protects damage due to weather.


In addition to weather, your construction site is insured against fire or explosive damage. If your site catches fire, you will be rewarded compensation in the amount of the now-depreciated value. There are exceptions, of course. If this fire is caused intentionally or starts as a result of faulty equipment, the insurance company will not pay out. To protect yourself, ensure that all of your equipment is in proper working condition. Also, be sure to properly store your equipment while it is not in use. If you follow the proper safety protocols, then builder insurance policies cover all fire damage at your construction site. Keep this in mind when trying to get coverage for your construction business.

External Theft

Furthermore, theft of materials and tools from your construction site is covered as long as that theft is committed by an external individual. As you move through the construction process, you will need easy access to numerous tools and materials. This may mean leaving these pieces of equipment out in the open at your construction site. If those tools and materials turn up stolen, rest assured that your policy covers theft. However, if the theft is committed by one of your employees or subcontractors, the insurance company will not cover the loss. If you can prove that a theft was committed by an external individual, then your builder insurance policy will cover the damage.


Included in most builder insurance policies is coverage against vandalism. This includes damage caused by graffiti as well as physical breakage of tools or materials by outside parties. Construction sites spend long hours each day being unoccupied, which invites vandals to come along and cause damage. Luckily, your builder insurance policy covers this. However, there are restrictions on this coverage similar to theft exclusions. If your employees vandalize your site or construction equipment, then the company will not payout for the damage. If your construction site is vandalized by external criminals, know that you are covered by your builder insurance policy.

Vehicle And Aircraft Crashes

Though these accidents are typically not considered when looking for a policy, many builder insurance plans offer coverage for vehicle crashes. If an accident sends a car careening into your construction site, the insurance company will cover the damages. While the chances of it happening are slim, builder insurance plans also cover damages caused by aircraft crashes. The coverage extends to payout even if you or your employees are the cause of the accident. That is not the case if the company can prove negligence on your part, of course. Though no one ever hopes for a vehicular accident, rest assured that your builder insurance policy covers such damages.

As the owner of a construction company, it is important that you know what damages are covered by your builder insurance plan. As long as you are properly protecting your structures as well as safely storing equipment, you are covered against weather and fire damages. Additionally, builders insurance protects you against theft and vandalism so long as the crimes are not committed by your own employees. Furthermore, most builders insurance companies cover against car and plane crashes. If you are on the hunt for coverage for your construction company’s projects, know what builder insurance covers.

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