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Got Upcoming Construction?

Guide to Builder’s Risk Insurance Coverage

Did you know that when building, you’re often required by the government or your bank to cover each building and structure that is under construction? Not only does this protect the building owners, but it protects all parties involved. Have no fear, here is guide of top considerations through your next construction project to mitigate risk and protect your ministry. Let’s get started!

When Should Coverage Start?

Coverage should typically begin as soon as the construction contract is signed. Knowing when your coverage starts and ends is important for ensuring continuous protection.

What Does Builder’s Risk Insurance Cover?

  1. Buildings and Structures: This includes not only the primary structure but also storage buildings, fencing, scaffolding, etc.

  2. Materials and Supplies: Construction-related materials, supplies, signs, trees, and plants are also covered.

  3. Valuable Papers and Data: Important documents and electronic data are also protected.

  4. Ordinance and Law: This covers the increased costs due to new codes and laws at the time of a loss during construction.

  5. Financial Impacts: Additional interest on loans, lost business income, real estate taxes, and rental income can be included.

  6. Pollution Clean-Up: It may be possible to include coverage for pollution clean-up.

What Are the Covered Causes of Loss?

Builder’s Risk insurance covers a range of incidents, including fire, lightning, hail, explosions, theft, vandalism, and acts of God, such as hurricanes and tornadoes (though some exclusions may apply).

Typical Exclusions

There are a few common exclusions, and actual coverage can vary. It’s important that you review your policy and ask your agent if any coverage extensions are available. Exclusions can include:

  1. Acts of terrorism and war

  2. Damage due to planning and design errors and omissions

  3. Issues with engineering or workmanship

  4. Employee theft

  5. Mechanical breakdowns

  6. Rust and corrosion

  7. Normal wear and tear

  8. Mold and pollution

  9. Earth movement, settling, cracking, and shrinkage

  10. Water intrusion

Estimating the Required Limit

To determine the appropriate coverage limit, consider:

  1. Transportation costs

  2. Materials

  3. Construction equipment and storage costs

Lastly, remember that both you and your contractor should carry general liability policies to cover other potential risks not included in Builder’s Risk insurance.

Builder’s Risk insurance provides peace of mind to protect your construction project from any unforeseen events. We hope these tips will help you keep your next building project on track and secure your investment in the case of any surprises. For personalized advice, contact United Methodist Insurance today to request a quote and learn more about how our Builder’s Risk insurance policies can protect your ministry.


This content has been prepared by United Methodist Insurance Company (UMI) for informational purposes only. No article or document may accurately contemplate all possible scenarios or church resources. As such, this information is meant to foster discussion by the individual church and its members to develop a plan tailored to its own circumstances. UMI is providing this information with no warranties or guarantees of any kind and it should not be viewed as legal, financial, or other professional advice. All liability is expressly disclaimed. Any claim examples described herein are general in nature, may or may not be based on actual claims, and are for informational purposes only. Any coverage available for a claim is determined from the facts and circumstances of the claim as well as the terms and conditions of any applicable policy, including any exclusions or deductibles. In the event of a conflict with the content herein, the terms and conditions of any issued policy will control. Individual coverage may vary and may not be available in all states.

The commercial insurance coverages for United Methodist Insurance are sold and serviced directly or indirectly by Sovereign Insurance Agency (CA Lic. No. 0B01380) ("Sovereign") and underwritten by various available insurance markets. Sovereign pays United Methodist Insurance a royalty for the use of its intellectual property.


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