Choosing a builder’s risk insurance provider in the U.S. is no easy task. There are multiple carriers, policy types, add-ons, and expansions to know and understand before selecting the right carrier suitable to insure a construction, renovation, or development project.
According to statistical estimates, half of construction ventures fail. This happens for many reasons, but inadequate insurance coverage can take the property owners’ or developers’ business down with it in financial terms.
Builder’s risk is the first line of fiscal defense against the risky nature of construction business. However, choosing a bare-bones policy for enterprises or large scale construction projects will often expose you to elements that builder’s risk doesn’t cover, such as water damage.
Water damage is the cause of more than 30% of the loss ratio in builder’s risk policies and the second most frequent cause of loss during construction.
Before we dive into some of the Builder’s Risk providers in the United States, let’s better understand the essence of what and how to evaluate an adequate carrier.
What is Builder’s Risk Insurance?
Builder’s risk insurance is a type of property insurance policy that provides coverage for the development, renovation, or construction of a building or structure (including the equipment used at the worksite) as the project progresses. Builder’s risk insurance is one of the most basic and common types of construction insurance offered by leading insurance carriers.
What are the benefits of having builder’s risk insurance?
Builder’s risk insurance protects builders and developers from ordinary but usually unexpected incidents that entail monetary implications during the construction phase. It can help cover additional ‘soft costs’, which are expenses or losses that are not directly related to construction.
In addition, while shopping around for the right builder’s risk policy for your project, you are bound to improve your risk management practices to comply with regulatory as well as insurer requirements for coverage or to be eligible for discounts.
Key things to look for when choosing a Builder’s Risk Insurance Provider
Reliability & Service Quality
As with any financial service, ensuring your service provider of choice is experienced, is critical. Fortunately, there is a relatively small number of carriers to compare when it comes to large scale projects, and service quality may vary according to state, insurance agency, and other variables. If you’re looking for an in-depth comparison of U.S. builder’s risk insurance providers, you can subscribe to a market research that compares large-scale insurers.
Flexibility & Supplementary Coverages
Builder’s risk insurance today is the name for a vast spectrum of property insurance coverage in construction. In most cases, you will need to extend your policy to include project-specific risks or remove certain types of coverage to lower the cost of your policy premium.
Innovation, Partnerships & Endorsements
The construction world today is not the same as it was a decade ago. It’s of utmost importance to consider how your insurer of choice regards innovation and technology and how much they leverage it to lower construction risks (and insurance policy costs as a result).
For example, WINT has partnered with leading insurers to offer incentives and financial reliefs in favor of reducing water damage risk based on technological innovation. These programs extend your coverage to include the most common cause for loss in construction projects – non-weather water damage. One insurance and reinsurance leader – HSB / Munich Re, even offers a water damage warranty program uniquely suited for builders. In the event that WINT technology fails to prevent water leak damage, HSB will reimburse the cost of resulting water damage up to $250,000 – therefore significantly minimizing or completely eliminating the exposure to high deductibles.
With AI-powered water management and leak mitigation, WINT has been able to help both policyholders and insurers mitigate the risks of water damage with dramatic results: 75% fewer claims and 90% less losses payouts.
Last but not least is the cost of your builder’s risk insurance policy. Many variables affect the price of a policy, so when requesting quotes, be sure you’re comparing apples with apples and presenting an identical “picture” of your project to the different carriers. Only then can you accurately compare policy fit against policy cost and strive to lower the costs of your builder’s risk insurance.
The list: 10 Leading Builder’s Risk Insurance Providers in the U.S.
Like with any insurance policy purchase, it’s important to shop around for the right builder’s risk insurance for your project and business needs.
To help you out, we’ve included ten of the leading insurance providers operating nationwide in 2024 in an alphabetical order.
* That said, you should always consult with your insurance broker before choosing a carrier. WINT does not recommend or advocate for any particular insurance company.
1. AXA XL
When it comes to lengthy and complex construction or renovation work on structures like airports and power plants, it’s worth getting a quote from AXA XL. They may be one of the only carriers with an appetite for massive, lengthy projects.
Builder’s risk at AXA XL covers property in the course of construction, including hot testing and delay in completion coverage for builder’s working on construction or renovation of ports. Energy production facilities (including refineries and alternative energy), hospitals, real estate/hospitality, sporting venues, water treatment facilities, civil works, bridges, and many more.
AXA XL offers project-specific or master builders risk insurance policies and has particular package policies for construction/erection phases. One of the unique features of AXA XL compared to other insurers is the availability of long construction terms – up to six years, with optional coverage for operational risk for the first 12 months.
Chubb is a global insurer with a solid reputation as the world’s largest publicly traded property and casualty insurance (P&C) company and the largest commercial insurance provider in the U.S.
Chubb’s builder’s risk insurance is available for domestic and commercial builders, and the insurer offers a specialized policy specifically for residential construction companies, focusing on domestic homebuilding.
The types of construction covered by Chubb’s builder’s risk policy include individual dwellings, clubhouses, model homes, and specific community and municipal projects.
Praised for the flexibility of their policies and speed of claim resolution, Chubb offers specific coverage for residential home builders, including infrastructure development insurance, vacant lot debris removal, and coverage for completed but vacant properties.
For builders operating in coastal regions, Chubb offers a unique policy called SPECTRA® for Builder’s Risk that provides coverage for named storms.
The Cincinnati insurance companies offer built-in builders risk coverage as part of their inland marine insurance program. These include foundations, excavations, grading, filling of land, and permission to occupy for 60 days or more. Coverage options include earthquake or flood sublimit, equipment breakdown, and soft costs.
The types of property and projects typically insured include schools, colleges, offices, condos, hospitals, retail operations, and infrastructure (street and sewer projects, including water treatment plants or municipalities).
Everest is a property, casualty, and specialty reinsurance and insurance solutions provider. It provides customized coverage for various CAR/4-Wall occupancy types, classes, and segments.
Even though Everest doesn’t specialize in construction insurance, it does include builder’s risk policy options under its inland marine insurance program.
In recent years, Everest has attempted to attract more customers in the construction vertical, offering a suite of Builder’s Risk policy forms offering commercial builder’s risk coverage products targeting project-specific builder’s risk and excess loss.
Founded in 1912, Liberty Mutual offers robust construction insurance programs, including a highly flexible builder’s risk policy to fit the diverse needs of builders on commercial and residential projects.
The main advantage of this provider is in the extensibility of their builder’s risk policy with optional coverage options to address the risks unique to your business and project. These include coverage for blueprints and construction documents, contract change orders, delays in completion, and many others.
It’s worth noting that Liberty Mutual is among the leading providers of builder’s risk insurance policies for projects exposed to the unique risks of wood frame construction and offers the most suitable coverage.
Since its establishment in 1926, Nationwide has built a solid reputation as a leading insurance company that offers flexible construction insurance policies to general contractors, developers, individuals, owners, corporations, and other stakeholders.
This insurer will offer builder’s risk insurance policies for commercial, residential, and renovation projects (including private residence renovation projects).
Nationwide’s builder’s risk policies can be extended and customized to suit every project and coverage needs. Endorsements are available for unique requirements such as debris removal, ordinance or law coverage, pollutant cleanup, and other construction-related risks.
For general contractors, Nationwide is a good choice as it offers a one-stop shop for all your construction insurance needs with an insurance envelope that addresses all the necessary coverage, including general liability, inland marine (mobile equipment & tools), workers’ compensation, errors & omissions, and others.
QBE North America is another insurer that doesn’t entirely specialize in construction but offers Builder Risk policies as part of their inland marine insurance programs.
The key features of the builder’s risk insurance offering by QBE include capacity up to $250,000,000 and standard and unique additional coverages for the insured’s specific risks. These can consist of Utility Service Interruption, Inflation Protection, Business Personal Property, Waterborne Property, and Equipment Breakdown Coverage (including Testing), as well as coverage for time elements such as Loss of Business Income, Delay Penalties, and Additional Expenses incurred by the policyholder.
8. The Hartford
The Hartford Insurance Company was founded in 1810, making it one of the oldest insurance businesses in the U.S.. It’s focused on serving the insurance needs of small businesses, including builders and contractors.
Known for their relative speed in providing quotes and extensive experience with construction insurance, The Hartford offers a flexible policy that can be expanded to include coverages for risk to heavy equipment, third-party property, valuable papers, electronic data, and testing processes of new equipment.
For builders, The Hartford has a unique offering for coverages related to “green building” including green building materials and renewable energy system installations (such as solar panels). Like other insurers, The Hartford bundles their builder’s risk policies with other important construction insurance products like liability insurance, workers’ compensation, and commercial vehicle insurance.
Founded in 1853, Travelers is the second-largest commercial insurance provider in the U.S. and one of the oldest in the business. However, age is no obstacle for Travelers as the insurer prioritizes technological innovation in managing construction risk with an online resource database for policyholders and digital tools for measuring worksite risk.
Travelers offer nationwide coverage through local agents and cover various building types, including stadiums, arenas, bridges, renewable energy, educational and medical/healthcare facilities, and public sector construction or renovation projects (such as street and road construction).
This insurer is unique in its approach to risk management, with a team of specialists visiting hundreds of work sites every month to help policyholders reduce risk through site-specific insights and recommendations.
Travelers offer its Construction Pak® policy for builders – broad and customizable builder’s risk policy designed specifically for the diversity of construction project categories this provider covers.
10. Zurich Insurance
Switzerland-based insurer Zurich is the world’s oldest provider of builder’s risk insurance, founded in 1872. It is also one of the largest publicly traded companies in the world and among the most trusted insurance companies worldwide.
Zurich offers builder’s risk insurance programs for commercial and residential construction projects over $50m in total construction value and operates through local subsidiaries like US Assure that administer builder’s’ risk programs for the U.S. region.
For builders, Zurich offers flexible policy options, with multiple project insurance packages available, built-in options for limit increases, and policy expansion throughout the policy term to cover additional types of construction risk.
Reduce water damage risk with WINT
Regardless of which insurance carrier you choose, it’s important to remember that non-weather damage is usually excluded from standard builder’s risk policies.
Be sure to ask your construction insurance agent or brokerage about water damage insurance expansions carriers offer and how they implement water damage risk mitigation in the field. Most leading insurers already partner with technology service providers like WINT to drastically reduce water damage risk in construction projects.
Don’t wait to be mandated to install water management solutions – Contact us today and explore how WINT can support your next builder’s risk project!