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Builder’s Risk Insurance

I have general liability insurance for my new California based contracting business. I’m about to sign a deal to build a house and now my client wants me to buy Builder’s Risk insurance, too. What’s up with that?

Your client is probably concerned that something could happen to damage or destroy his home before he ever gets a chance to move into it. There could be vandalism, or a fire, or a lightning strike, or a storm with heavy winds.

Some kinds of damage are not automatically covered when you buy a builder’s risk policy. In California, earthquakes are always a concern. However, earthquake coverage, like water damage or wind damage to buildings in a beach area, usually requires special underwriting and is not automatically included in a builder’s risk policy.

Some builder’s risk policies may also provide coverage for expenses from completion delays, for example from contract change orders.

Builder’s risk insurance is a form of inland marine insurance.  (Don’t let the name fool you—no boats  are involved!) In California, builder’s risk insurance can be purchased as part of an umbrella policy that includes excess liability and Workman’s Compensation insurance.

What if somebody gets hurt as a result of work being done on a site covered by builder’s risk insurance?

Builder’s risk insurance covers damage and losses during construction that are not covered under your general liability or California Workers’ Compensation policy.  A work-related injury to an employee would most likely result in a Worker’s Compensation claim. An injury to someone visiting the site, or the loss of property belonging to others, would come under your contractor’s general liability insurance.

Will one builder’s risk policy cover all of my new construction projects?

No, you will need a separate policy for each new construction project. You should have a policy in place before materials are purchased and delivered to the construction site because materials are covered in transit to the site and while stored onsite, as well as the building itself.

A California builder’s risk policy ends when construction ends and the structure is ready for occupancy. At that point, the owner must have property insurance in place to cover the structure.

Is builder’s risk insurance available only for new construction?

In California, builder’s risk coverage can be purchased for remodeling or renovation of an existing building as well as for new construction. For example, you might take out a builder’s risk policy before you build an addition to a house or do a major kitchen update.

However, builder’s risk insurance only covers vacant buildings, so it isn’t available if the owner plans to remain in the structure during construction.

Our partners

Southern State Insurance is a company that works with various carriers in order to provide our clients with more options and more competitive rates. Some of the carriers we have partnered with are:

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Anwaar S.Chula Vista, CA

“Southern State Insurance has been our provider of business liability insurance for the past 2 years. They are very responsive when need anything, and we find their pricing to be competitive. We are happy with the insurance services we have with Southern State.”

Joe R.San Jose, CA

“Great company,great service Anyone who answers the phone is able to take care of all my requests… Nick,Carolina,Karen or Alfa
Good price and even better service”

Owner Colbern Communications

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“After being ripped off at other insurance places i came down to this office where they were able to get me a significantly lower rate and got rid of my previous issue i had with my other company. everyone was friendly and cheerful 6 months later i got a call from Alfa who was so nice she was able to get my insurance down another 5$ monthly and still keep my benefits. I’m definitely sticking with these guys forget those other rip offs.”

Attila V.San Diego, CA


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