5 Things You Need to Know About Builder’s Risk Insurance in Connecticut

When starting a construction project in Connecticut, protecting your investment is just as important as the building itself. That’s where Builder’s Risk Insurance comes in. This specialized insurance coverage is designed to safeguard structures under construction, offering financial protection against unexpected damages and delays.

Whether you’re a property owner, developer, general contractor, or construction firm, understanding Builder’s Risk Insurance is crucial. It not only helps mitigate financial risks but is often a requirement for securing construction loans. Without proper coverage, unforeseen events like theft, fire, or severe weather could result in significant financial losses.

This guide breaks down the five essential things you need to know about Builder’s Risk Insurance in Connecticut, helping you make informed decisions and ensuring your construction project stays on track.

1. What is Builder’s Risk Insurance?

Builder’s Risk Insurance—also known as Course of Construction Insurance—is a temporary property insurance policy that covers buildings while they are under construction. It protects against various risks that could damage the structure, delay the project, or increase costs.

How Does It Work?

• Covers damages to the structure itself during the construction phase.

• Protects materials, supplies, and equipment stored on-site or in transit to the site.

• Helps ensure a smooth project timeline by reducing financial risks associated with unforeseen damages.

Without this coverage, a single unexpected incident—such as a fire or theft—could set a project back months and significantly increase costs.

2. What Does Builder’s Risk Insurance Cover?

A standard Builder’s Risk Insurance policy in Connecticut typically provides protection against: 

✅ Fire, theft, and vandalism: safeguards against common risks that could damage materials and structures. 

✅ Weather-related damages: Covers losses due to windstorms, hail, lightning, and even explosions. 

✅ Debris removal costs: helps with cleanup expenses after a covered event. 

✅ Loss of income due to construction delays: If covered damages cause delays, financial losses may be mitigated. 

✅ Temporary structures: includes scaffolding, fencing, and even signage essential to the project.

Every policy varies, so customizing coverage based on the specific needs of your project is essential to ensuring full protection.

3. Who Needs Builder’s Risk Insurance in Connecticut?

Builder’s Risk Insurance isn’t just for large construction firms—anyone involved in a construction project should consider this coverage. Key stakeholders who benefit from a policy include:

🏗️ Property Owners & Developers: Protect your financial investment in new construction or major renovations. 

🔨 General Contractors & Subcontractors: Ensure project continuity and minimize financial risks. 

🏦 Lenders & Financial Institutions: Often require Builder’s Risk Insurance before approving construction loans.

If you’re undertaking a new build or major renovation in Connecticut, this coverage is a critical safeguard for your financial and project security.

4. What Isn’t Covered by Builder’s Risk Insurance?

While Builder’s Risk Insurance is comprehensive, it doesn’t cover everything. Here are some common exclusions:

🚫 Flood and earthquake damage typically: requires a separate policy or endorsement. 

🚫 Employee theft: losses due to dishonest acts by workers are generally not included. 

🚫 Faulty workmanship or design errors: Issues stemming from construction defects aren’t covered. 

🚫 Normal wear and tear: expected aging and deterioration are not insurable risks.

To ensure full protection, policyholders can add endorsements for specific exclusions like floods or faulty workmanship.

5. How Does Builder’s Risk Insurance Work in Connecticut?

Understanding the policy duration, costs, and flexibility of Builder’s Risk Insurance can help you make the best decision for your project.

📅 Policy Duration: Coverage begins when construction starts and typically ends when the project is completed or occupied. 

💲 Premium Costs: Generally 1-5% of the total construction budget, depending on the project size, location, and risks involved. 

🔄 Policy Extensions & Cancellations: If construction is delayed, policies can often be extended. If completed early, policies may be canceled on a pro-rata basis.

Understanding these details ensures you’re not overpaying or left without coverage at a crucial stage of your project.

Conclusion

Builder’s Risk Insurance is a must-have for construction projects in Connecticut, offering protection against financial losses due to damage, theft, and delays. Without the right policy, a single incident could lead to costly setbacks.

To ensure your project stays secure, consult with an experienced insurance provider to customize coverage based on your specific construction needs. Whether you’re a property owner, contractor, or developer, the right policy can make all the difference in protecting your investment.

🔹 Ready to safeguard your Connecticut construction project? Explore your Builder’s Risk Insurance options today! 🔹

Call us at (860) 970-0977 or send us an email at info@insureinct.com