Builders Risk/Course of Construction (COC) Insurance

Indemnifies for loss of or damage to a building under construction. Insurance is normally written for a specified amount on the building and applies only in the course of construction. Coverage customarily includes fire and extended coverage and vandalism and malicious mischief. Builders risk coverage can be extended to a special form as well. The builders risk policy also may include coverage for items in transit to the construction site (up to a certain percentage of value) and items stored at the site.

Think of it like home owners insurance without someone living there. It covers the property, contents, building material and liability while being built. Most polices include some coverage for the material during transport and for storage of material even if it is stored off-site.  Covers theft, fire, vandalism, and injury liability if someone is injured on the property.  The property owner can be the owner of the policy. Or, the builder.

  • If there is a loan for the construction, most likely the bank is requiring proof of the insurance.
  • If it is likely the project will go over a year, it is wise to ask for a policy that is more than 12 months.
  • Regardless of who the owner of the policy will be, the carrier will want to know the info about the GC and their experience.
  • Some COC policies will automatically convert to homeowners after the residents move in. Ask your agent about that feature if you are interested in such a feature.
  • The applications will ask for hard costs and soft costs. Examples of soft costs are like architect design and building permits.  Hard costs are like material costs and labor.

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