How Much Does Builder’s Risk Insurance Cost?

Builder’s risk insurance is the first step that property owners take to protect their construction projects. It offers a shield against a range of disasters, be it natural or human-made. From theft to fires or storms, the right policy can compensate you accordingly. Sound policy can mean the difference between the end of a dream and a delay in creating it. Most plans cost between 1% to 4% of the total construction costs.

Be prepared to spend around $1000 to $4000 on a policy that covers the essentials for a property that costs hundred thousand dollars to build. While it may sound like a tough pill to swallow, it has its benefits. The prices vary based on the details and other factors. The following section breaks down the main factors that impact builder’s risk insurance policy cost.


Factors That Affect The Builder’s Risk Insurance Cost

  • Location Of ProjectThe rates of insurance policies vary significantly from state to state. They even vary based on the area where the construction will occur. Some locations may be prone to hailstorms or fires. A few areas may also be prone to theft and vandalism so that policies will take those factors into account.
  • Quality Of Materials – The usage of top-notch materials, be it for cabinets or windows, can drive up costs. In turn, the terms of the policy will change. This cost increase may result in additional premiums that need to be kept in mind.
  • Duration Of Construction – The duration of a project is directly related to the cost of the policy. This link is because the window for accidents is smaller with shorter time durations. Smaller projects face lower risks in general, especially when it comes to crime and theft. Besides, longer projects often have more downtime. Leaving the building site unattended leaves it open for further losses.
  • Renovations And Remodeling – The cost increases if an existing structure has to be protected during a renovation project. This means that the contractors and subcontractors must take additional care while working on the project. It’s another risk factor that will be taken into account by the insurance policy. Most policies also specify the percentage of the building cost, the renovation cost must be, for them to take effect.
  • A New Construction Project – A new project requires coverage for a variety of tasks. From excavation, site preparation to plumbing and laying lines for electricity, these tasks significantly drive up costs. Each step in this process is at risk of being affected by all forms of damage and losses. As a result, these steps play a significant role in terms of a builder’s risk insurance policy. This reason is why this form of insurance must be obtained before the project begins.



While the costs may seem rather significant, especially for larger projects, it is undoubtedly worth the price. Builder’s risk insurance is an essential tool that will ensure that things sail smoothly. Situations that could have been nightmares for your finances will be reduced to mere temporary setbacks. Protect your new project from the elements. Invest in a robust policy and get your project off to a great start!

Also, if you are unsure about who pays the insurance premium for the policy, you can go to this link to learn more.


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