Builder's Risk Insurance
Builder's Risk Insurance is specialized property insurance that protects a building under construction or major renovation, covering damage from fire, theft, vandalism, and weather during the construction period.
What You Need to Know
If you're building a new restaurant or doing a major renovation, standard property insurance won't cover the work in progress. Builder's risk fills this gap until the project is complete.
Builder's risk typically covers:
- The building structure under construction or renovation
- Materials and supplies on-site waiting to be installed
- Fixtures and equipment being installed
- Temporary structures like scaffolding and fencing
Coverage generally starts when construction begins or materials arrive on-site, and ends when the project is substantially complete or a certificate of occupancy is issued. Typical policy periods run 6-18 months, extendable if the project runs long. Standard exclusions include design defects, defective workmanship, and mechanical breakdown.
Why It Matters for Restaurant Owners
Construction projects represent huge investments — often hundreds of thousands of dollars. A fire during construction could destroy all that work with no insurance payout if you don't have builder's risk coverage.
Who typically needs it:
- New construction — building a restaurant from the ground up or converting another building
- Major renovations — gut renovations, kitchen rebuilds, structural changes
Never assume your general contractor already has this coverage — clarify in your construction contract who's responsible for obtaining it, and confirm you're named as additional insured if the contractor is providing it. If project costs increase due to change orders, increase your builder's risk limit immediately, and coordinate the policy's end date carefully so there's no gap before your standard property coverage begins.
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