Builders Risk Insurance for New York Construction and Renovation Projects
Your lender is requiring it. Your standard property policy doesn't cover it. A builders risk policy is the temporary coverage that protects a structure from the day construction starts to the day it's complete — and we've been placing these policies for Long Island contractors and property owners for over 30 years.
What Builders Risk Insurance Actually Covers
Builders risk is a property insurance policy that covers a structure while it's under active construction or renovation. It's sometimes called course of construction insurance, and it works differently from a standard property policy — it's designed specifically for the risks that exist during a build.
A builders risk policy typically covers:
- Physical damage to the structure from fire, wind, lightning, hail, and vandalism
- Theft of building materials and equipment on-site
- Damage to materials in transit to the job site
- Temporary structures such as scaffolding and forms
- Soft costs in some policies — architect fees, permit costs, and financing charges resulting from a covered delay
What it does not cover is equally important to understand. Standard builders risk policies exclude damage caused by faulty workmanship or design error, flood, earthquake, employee theft, and mechanical breakdown. If your project is in a flood-prone area — and on Long Island, many are — a separate flood policy is typically required.
Why Your Existing Policy Doesn't Cover an Active Construction Project
This is the gap that catches property owners off guard. Standard homeowners policies and commercial property policies are written for completed, occupied structures. When a structure is under active construction or undergoing a significant renovation — a kitchen addition, a second-story build-out, a post-storm coastal elevation project — most policies either exclude coverage entirely or limit it sharply.
The threshold varies by policy, but once a renovation exceeds a certain scope or a structure is left unoccupied during construction, your existing coverage steps back. Builders risk fills that gap for the duration of the project. When the work reaches substantial completion and the property transitions to occupied use, the builders risk policy expires and your permanent property coverage takes over. Timing that transition correctly matters — we walk you through it before the project ends so there's no gap between the two.
Who Is Responsible for Purchasing Builders Risk — Owner or Contractor?
This question comes up on almost every project, and the answer depends on the contract. Either the property owner or the general contractor can be named as the insured on a builders risk policy. Both parties — along with subcontractors and the lender, if applicable — can be listed as additional insureds.
What determines who buys it is the language in your construction contract. Some contracts assign responsibility to the owner. Others place it on the GC. When the contract is silent on the issue, it becomes a negotiated point — and starting a project without clarity on this creates real exposure for both sides.
We review the contract language with you before the project starts and advise on the right structure. If you're a general contractor navigating this question across multiple projects, our construction insurance team handles this regularly and can help you standardize how it's addressed in your agreements.
How a Builders Risk Policy Is Structured and What It Costs
Builders risk policies are written for a defined project period — typically six months to a year — with the option to extend if the project runs long. The policy limit is set at the completed value of the structure, not the current value at the time of purchase. That means if you're building a $600,000 addition, the policy is written to $600,000 from day one.
Premium is calculated based on the completed project value, the type of construction, the location, and the coverage options selected. Coastal projects on Long Island may carry additional considerations given wind and flood exposure. Renovation projects are generally rated differently than ground-up new construction.
Because builders risk is a temporary policy by design, it's also relatively straightforward to structure — but the details matter. Coverage for materials stored off-site, soft costs, and ordinance or law compliance can significantly affect what you recover if something goes wrong mid-project.
Builders Risk for Long Island Renovation Projects
Long Island has seen sustained renovation activity for years — additions, kitchen and bath remodels, full gut renovations, and coastal elevation projects, many of them driven by post-Sandy rebuilding requirements. These projects often involve significant investment, extended timelines, and construction lenders who require proof of builders risk coverage before the first draw.
If you're a homeowner financing a renovation, your lender will ask for a builders risk policy as a condition of the loan. If you're a contractor managing the project, the contract may place that responsibility on you. Either way, the policy needs to be in place before work begins — not after the foundation is poured.
We place builders risk coverage for residential renovation projects, new home construction, commercial build-outs, and mixed-use projects across Suffolk County and Nassau County. If your project is on Long Island, we know the local market and the carriers who write this coverage here.
Why Long Island Contractors and Property Owners Work With Us
What is builders risk insurance and why is my lender requiring it?
Builders risk insurance — also called course of construction insurance — is a temporary property policy that covers a structure while it's being built or renovated. Construction lenders require it because the structure serving as collateral for the loan is exposed to fire, wind, theft, and other damage during the build period. The policy protects both the borrower and the lender's interest in the project.Does my homeowners insurance cover a major renovation?
Standard homeowners policies typically exclude or severely limit coverage for structures under active construction above a certain scope. If you're doing a significant addition, a full renovation, or any project that leaves the structure partially open or unoccupied during construction, you likely need a builders risk policy for the duration of the work.When does a builders risk policy expire?
Builders risk policies are written for a defined project period and expire at substantial completion — when the structure is finished and ready for occupancy or use. At that point, coverage transitions to a permanent homeowners or commercial property policy. If the project runs over schedule, most policies can be extended. We help you plan the transition so there's no gap between the two policies.What does builders risk insurance not cover?
Standard builders risk policies exclude damage caused by faulty workmanship, design error, flood, earthquake, employee theft, and mechanical breakdown. Flood is a particularly important exclusion for Long Island projects — if your site has flood exposure, a separate flood policy is typically required alongside the builders risk policy.Who should be named on the builders risk policy — the owner or the contractor?
Either party can be named as the primary insured, and both can be listed along with subcontractors and the lender as additional insureds. The construction contract typically specifies who is responsible for purchasing the policy. We review the contract language with you and advise on the right structure before the project starts.