Business Insurance
Builders Risk Insurance in Arizona
What is builders risk?
Builders risk insurance covers a structure while it is being built or renovated, along with materials on site, in transit, and sometimes in temporary storage. Standard property policies are not designed for buildings under construction, and many exclude them outright.
Owners, builders, and investors all buy builders risk, and lenders on construction loans almost always require it.
Who needs it
Builders risk applies to:
- General contractors on ground-up construction
- Homeowners building custom homes or doing major remodels
- Fix-and-flip investors renovating properties
- Developers of residential and commercial projects
- Anyone whose construction loan requires course-of-construction coverage
What it commonly covers
A builders risk policy typically covers:
- The structure under construction, at its stage of completion
- Building materials on site awaiting installation
- Materials in transit and in temporary off-site storage, if selected
- Fire, wind, theft, and vandalism during the project
- Soft costs and loss of income extensions on some forms
What it may not cover
Common exclusions:
- Faulty workmanship and design errors themselves
- Tools and equipment of contractors, which belong on inland marine
- Liability for injuries, which needs general liability
- Projects that pass their completion date without an extension
- Earthquake and flood, unless added
Coverage varies by policy. The details above are general; your policy's terms control.
When it's commonly required
- Construction lenders require it before funding draws
- Owner agreements assign responsibility for course-of-construction coverage
- Permitted structural work often makes it a practical necessity
How BrokerPro approaches it
Builders risk is project math: project value, construction type, duration, and location. The most common mistakes we see are underestimating the completed value and underestimating the timeline. Extensions are possible, but they are easier to avoid by being realistic upfront.
For flippers and investors, we also look at whether a renovation builders risk form or a vacant renovation policy fits the project better, since the line between the two depends on scope.
Common questions
Who buys builders risk, the owner or the contractor?
Either can. The construction contract should say who is responsible. What matters is that one policy covers the project with the owner, contractor, and lender all properly named. Duplicated or missing coverage both cause problems.
Does builders risk cover theft of materials from the job site?
Generally yes, theft of materials is one of the core covered perils, subject to the policy conditions. Lumber and copper theft are exactly the kinds of losses these policies see in Arizona.
My flip project will take six months. How should I insure it?
A renovation builders risk policy for the project term is the usual answer, often with vacancy permission since flips sit empty. Tell us the scope, budget, and timeline and we will match the form to the project.
Ready to look at builders risk options?
Send us the basics and we'll come back with practical choices and plain-English explanations. No runaround.