Builders Risk Insurance in Texas

Builders Risk: Essential Protection for Your Woodlands Construction Project

From new custom homes to major commercial developments, construction is a constant sign of growth and investment in The Woodlands. Every new project represents a significant financial commitment. A Builders Risk insurance policy is the essential protection for that investment, from the moment you break ground until the project is complete.

Who Needs Builders Risk Coverage in The Woodlands?

This specialized coverage is a must-have for anyone invested in a new build or major renovation, including:

• Custom Home Builders creating new properties in villages like Creekside Park or Carlton Woods.

• Property Owners undertaking a large-scale home renovation or addition in an established neighborhood.

• General Contractors overseeing a new commercial build-out or restaurant space at Hughes Landing or a local village center.

Protecting Your Project From Common Local Risks

A structure under construction is uniquely vulnerable, and a standard property policy won't cover it. Builders Risk is designed to protect your project from the most common and costly risks in our area:

• Severe Weather: This is a primary concern. The policy protects the partially completed structure and on-site materials from damage caused by the high winds and hail of a sudden Texas thunderstorm.

• Theft: It covers the loss of expensive materials, fixtures, and appliances that are stolen from the job site—a common problem for unsecured locations.

• Vandalism & Fire: It protects your investment against malicious damage or a fire that could destroy months of hard work and materials in an instant.

A Builders Risk policy can be tailored to your project's specific value and timeline, covering the structure, on-site materials, and even temporary structures.

Don't let one unforeseen event derail your entire project. As your local Woodlands agent with expertise in construction insurance, we can provide a fast, tailored quote for your specific build. Contact us today to get the right protection in place before you start.

Builders Risk Insurance FAQ

What is Builder's Risk Insurance?

Builder's Risk insurance is a specialized type of property insurance designed to protect a building or structure while it's under construction or renovation. 🏗️ It's a temporary policy that covers the value of the structure and the materials on-site from damage or loss due to covered events like fire, theft, or weather.

Who needs to purchase a Builder's Risk policy?

Anyone with a financial stake in a construction project needs this coverage. This typically includes:

• General Contractors

• Custom Home Builders

• Property Owners

• Real Estate Developers

• Flippers and Remodelers

Is the contractor or the property owner responsible for buying the policy?

Either party can purchase the policy. This is usually determined by the construction contract. It's crucial to have a written agreement clearly stating who is responsible for securing the policy to ensure there are no gaps in coverage.

How is Builder's Risk different from Commercial Property Insurance?

A Commercial Property policy is designed for a completed, occupied building. A Builder's Risk policy is designed for a building in progress. Construction sites have unique risks (like theft of materials and weather exposure) that a standard property policy is not designed to cover.

What does a standard Builder's Risk policy cover?

The policy primarily covers the structure being built and the materials that will become a permanent part of it. This includes:

• The building or structure itself.

• Building materials and supplies on the job site.

• Foundations, scaffolding, and temporary structures.

• Labor costs and expenses incurred as part of the construction.

Are building materials covered if they are stored off-site or in transit?

Coverage for materials stored at a temporary off-site location or while in transit to the job site is not standard but can often be added as an endorsement. If you store valuable materials away from the construction site, it's a vital coverage to have.

Does the policy cover my construction tools and equipment?

No. Your tools and mobile equipment (like bulldozers or generators) are not covered. Those items are protected by a separate Contractors Equipment Insurance policy.

What types of perils are covered?

Most Builder's Risk policies are written on an "open peril" or "all-risk" basis, covering damage from any cause except those specifically excluded. Common covered perils include:

• Fire

• Theft and Vandalism

• Hail and Lightning

• Explosions

• Damage from Vehicles or Aircraft

Is damage from hurricanes or windstorms covered in Houston?

This is a critical point for any project in the Houston area. Windstorm coverage is usually included, but it may have a separate, higher deductible (often a percentage of the property value). It is essential to confirm that your policy has adequate windstorm coverage and that you understand the specific deductible that applies.

Is theft of building materials, like copper wiring, covered?

Yes. Theft of materials that are scheduled to be permanently installed in the structure is a primary coverage. Given the high value of materials like copper, lumber, and appliances, this is one of the most important protections the policy offers.

What is not covered by a standard Builder's Risk policy?

Common exclusions include:

• Damage from floods and earthquakes (requires separate policies).

• Employee injuries on the job site (covered by Workers' Compensation).

• Liability for injuring a third party (covered by General Liability).

• Faulty workmanship, material, or design (this is a contractor performance issue).

• Normal wear and tear.

Does Builder's Risk cover liability for job site injuries?

No. Builder's Risk is a form of property insurance, not liability insurance. You still need a General Liability policy to protect against claims of bodily injury or property damage to others.

How long does a Builder's Risk policy last?

The policy term is tailored to the expected length of your specific construction project. Policies can range from three months to a year or more, and they can typically be extended if the project runs longer than anticipated.

What happens to the policy when the construction project is complete?

Coverage under a Builder's Risk policy ends once the project is completed and the building is ready for occupancy, sold, or put to its intended use. At that point, you must switch to a permanent Commercial Property or Homeowners Insurance policy.

How is the coverage amount (policy limit) for a Builder's Risk policy determined?

The policy limit should be equal to the total completed value of the project. This includes all materials, labor, and overhead—essentially, what the entire project will be worth on the day it's finished, not just the construction costs.

Can I get a policy for a small renovation or remodel project?

Absolutely. Builder's Risk isn't just for new construction. It's also designed to cover the value of renovations, additions, and remodels to an existing structure.

What are "soft costs" and are they covered?

Soft costs are expenses not directly related to construction, such as architectural fees, engineering costs, legal fees, and loan interest. Standard policies do not cover these, but you can add a Soft Costs endorsement to protect against these financial losses if a project is delayed by a covered event.

What is a "change order," and how does it affect my policy?

A change order is an amendment to the original construction contract that changes the scope of work. If a change order significantly increases the total value of the project, you must contact us to increase your policy limit to avoid being underinsured.

How much does Builder's Risk insurance cost?

The cost is typically between 1% and 4% of the total construction budget. The exact premium depends on the project's type, location, duration, and the coverages you select.

What factors influence the premium?

Insurers assess the project's risk based on:

• Project Value: Higher-value projects cost more to insure.

• Construction Type: A wood-frame building is riskier (and more expensive to insure) than a steel-frame one.

• Location: Proximity to fire hydrants and risks like coastal weather in the Houston area will affect the rate.

• Project Duration: Longer projects mean longer periods of risk.

• Contractor's Experience: A contractor with a proven track record may receive better rates.

What should I do if there is a loss or damage at my construction site?

First, take immediate steps to secure the site and prevent further damage. If a crime occurred (like theft or vandalism), file a police report. Then, document the damage with photos and contact our agency right away.

How do I file a Builder's Risk claim?

Call our office as soon as possible. We'll gather the details of the loss, advise you on the next steps, and formally report the claim to your insurance carrier. Be prepared to provide photos, a police report (if applicable), and any receipts for damaged materials.

What is an "additional insured" on a Builder's Risk policy

An additional insured is another person or entity (like a subcontractor, architect, or lender) who is granted coverage under your policy for their financial interest in the project. This is a common requirement in construction contracts.

Does the policy cover damage from faulty workmanship or design errors?

No. The policy is not a warranty for the quality of work. Damage resulting from a contractor's poor workmanship or a flawed design is typically excluded. The policy may cover the ensuing damage caused by the faulty work, but not the cost to fix the mistake itself.

Is a Builder's Risk policy required to get a construction loan?

Yes, in almost all cases. Lenders and financial institutions will require you to provide proof of a Builder's Risk policy before they will release funds for a construction project to protect their investment.

Client Feedback

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The builders risk coverage saved my project from major losses.

Jesus T.

Willis, TX

Excellent service! Their builders risk insurance coverage was crucial for my construction business's success.

Veronica C.

Chicago

★★★★★

★★★★★

Huntsville, Tx