Builder's Risk Insurance
A property insurance policy covering a building under construction against physical loss from fire, wind, theft, vandalism, and similar perils during the construction period, distinct from [[concept-general-liability-insurance|general liability insurance]], which covers third-party injury and damage claims rather than damage to the structure itself.
Why it matters
Because a half-built structure isn't insurable under a standard property policy the way a finished building is, builder's risk coverage fills that specific gap, and the contract has to clearly assign who's responsible for procuring it (usually the owner or the general contractor), since a project without it left uninsured during a fire or storm can be a total financial loss for whoever was supposed to carry the coverage.
On a real project
A fire breaks out on a partially completed office building due to an electrical malfunction, destroying several months of completed framing and rough-in work. The project's builder's risk policy covers the rebuild cost, since the contract required the owner to maintain builder's risk coverage for the full value of the work in progress throughout construction.
Who this matters most to
A Safety Manager coordinates with the builder's risk insurer after any incident that damages work in progress, since a proper claim requires documentation similar to a safety incident report. A Contracts Administrator confirms which party's contract obligation it is to procure and maintain builder's risk coverage before construction starts, since an uninsured gap discovered after a loss is far too late to fix.
Where this goes wrong
A contract is silent on exactly who is responsible for procuring builder's risk insurance, and both the owner and the general contractor separately assume the other party has it covered. A storm damages significant completed work before either party discovers, mid-claim, that no builder's risk policy was ever actually purchased by anyone.
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