That is where builders risk insurance comes in.
Builders risk insurance, also called course of construction insurance, is a temporary property insurance policy designed to protect buildings and structures while they are being built, remodeled, or installed. It can help cover damage to a project before it becomes a completed building covered by a permanent property policy.
Before the summer construction season gets into full swing, it is worth taking a closer look at how your project is protected.
Why builders risk matters during summer construction season
When a project is under construction, it is exposed in ways a finished building is not.
Materials may be stored outside. Open structures may be more vulnerable to weather. Equipment, scaffolding, and temporary structures may be on site. Subcontractors may be coming and going. A project that looked secure on Friday afternoon may look very different after a weekend storm or theft.
For Montana projects, the summer season can create added pressure. Contractors are trying to complete work during a limited weather window. Owners may be working toward occupancy deadlines. Developers may have financing, lease, or sale timelines tied to project completion.
A covered loss during construction can do more than damage materials. It can delay the entire project.
Builders risk insurance helps protect the investment being made before the project is finished.
What builders risk insurance can help cover
Every policy is different, but builders risk insurance may help protect a construction project from covered causes of loss such as:
Fire
Lightning
Hail
Explosions
Theft
Vandalism
Extreme weather
Coverage may also be available for items tied to the project, such as materials, supplies, on-site equipment, scaffolding, construction forms, and temporary structures. Depending on the policy, builders risk may also help with certain expenses that result from a covered delay, such as lost sales, rental income, or real estate taxes.
The key is making sure the policy matches the project.
A remodel, a new commercial build, a municipal project, and a residential development may all have different needs. The location, project value, timeline, materials, contractor experience, and site conditions can all affect coverage.
- Review coverage before materials arrive
One of the most common timing mistakes is waiting too long to discuss builders risk coverage.
A project can be exposed before vertical construction begins. Materials may be delivered, stored, staged, or transported before the structure is complete. If damage or theft happens before coverage is in place, the cost may fall back on the owner, contractor, or another party depending on the contract.
Before summer work begins, ask:
When does the builders risk policy start?
Are materials covered before they are installed?
Are materials covered while in transit?
Are materials covered while stored off-site?
Who is responsible for damage before installation?
These details matter, especially when supply schedules and construction timelines do not line up perfectly.
- Make sure the policy limit reflects the completed project value
Builders risk limits should generally be based on the total anticipated completed value of the project. That may include materials, labor, overhead, and other project-related costs.
Underinsuring the project can create problems after a loss. If construction costs have increased, materials have changed, or the scope has expanded, the original estimate may no longer be enough.
Before the project moves into the busiest part of the season, review:
The current construction budget
Change orders
Material cost increases
Labor cost changes
Site work and soft costs
Architectural, engineering, and permitting costs
Any lender or contract requirements
A policy that made sense at the start of planning may need to be adjusted once the actual project numbers are clearer.
- Know who is covered under the policy
Builders risk coverage is not always limited to the person or company paying for the policy. A policy may include multiple covered parties, such as the property owner, developer, general contractor, subcontractors, and lender.
This should be addressed before contracts are signed and before work begins.
Questions to ask include:
Who is required to purchase the builders risk policy?
Is the property owner listed?
Is the general contractor listed?
Are subcontractors included?
Does the lender need to be listed as mortgagee or loss payee?
Does the contract match the insurance policy?
This is especially important when several parties have a financial interest in the project. If a loss occurs, confusion over who is covered can slow down the claim process and create disputes at the worst possible time.
- Pay attention to summer weather exposures
Montana weather can change quickly. A clear summer day can turn into wind, hail, lightning, or heavy rain. For a construction site, those risks can be more damaging than they would be for a finished building.
Open framing, exposed roofing, stored materials, temporary structures, and partially completed work can all be vulnerable.
Before the season picks up, consider whether the project plan addresses:
Hail exposure
Wind damage
Lightning and fire risk
Water intrusion
Temporary roof coverings
Drainage around the site
Protection for stored materials
Securing loose materials before storms
Builders risk insurance may help when a covered weather event damages the project, but risk management still matters. Good site practices can help reduce the chance of a loss and may help keep the project moving.
- Do not overlook theft and vandalism
Longer daylight hours do not eliminate jobsite theft. In fact, busy construction seasons can create more opportunities for materials, tools, copper, appliances, fixtures, and equipment to disappear from a site.
Theft and vandalism can be especially frustrating because the cost is not always limited to the stolen item. A missing shipment or damaged installation can delay subcontractors, inspections, and next steps in the schedule.
To help reduce risk, project teams should think about:
Site fencing and controlled access
Lighting
Locked storage
Security cameras
Material delivery timing
Inventory documentation
Procedures for weekend and after-hours access
Builders risk coverage may respond to theft or vandalism if those causes of loss are covered, but the policy language, deductibles, and conditions should be reviewed carefully.
- Understand whatbuildersrisk does not cover
Builders risk insurance can cover many construction-related property exposures, but it does not cover everything.
Common exclusions may include damage from faulty design, employee theft, mechanical breakdown, rust, corrosion, wear and tear, acts of war or terrorism, and certain natural disasters such as flood or earthquake unless coverage is specifically added or endorsed.
This is one of the most important parts of the conversation.
A contractor or property owner may assume a builders risk policy covers “anything that happens during construction.” That is not the case. The policy is designed for covered causes of loss, and every policy has exclusions and limitations.
Before work begins, ask your insurance advisor:
What exclusions apply?
Is flood or earthquake excluded?
Is faulty workmanship, faulty design, or defective materials excluded?
Are testing and startup losses addressed?
Are soft costs or delay costs included?
Are there vacancy, security, or site-condition requirements?
What deductibles apply?
Understanding the exclusions now can prevent surprises later.
- Review delay-related costs
A covered loss during construction can affect more than materials and labor.
If a project is delayed, the financial impact can spread quickly. A developer may lose rental income. A business owner may lose sales. A property owner may continue paying interest, taxes, or other carrying costs while the project is repaired.
Some builders risk policies may include coverage for certain delay-related expenses, but this should never be assumed.
Review whether the policy addresses:
- Lost rental income
- Lost sales
- Real estate taxes
- Interest or financing costs
- Additional soft costs
- Extended general conditions
- Extra expenses needed to get the project back on schedule
This can be especially important for commercial, municipal, and income-producing properties where timing is tied to revenue or occupancy.
- Coordinatebuildersrisk with other construction coverage
Builders risk insurance is important, but it is only one part of a construction insurance program.
It is property coverage for the project under construction. It is not the same as general liability, workers compensation, commercial auto, inland marine, professional liability, or surety bonding.
Depending on the project, contractors and property owners may also need to review:
- General liability
- Workers compensation
- Commercial auto
- Contractors equipment coverage
- Inland marine coverage
- Umbrella or excess liability
- Professional liability
- Pollution liability
- Surety bonds
- Contract requirements
The goal is to avoid gaps between policies. For example, builders risk may address damage to the project itself, while general liability may respond to certain third-party injury or property damage claims. Inland marine may be needed for tools, equipment, or materials in transit. Workers compensation may be required for employee injuries.
A strong insurance plan looks at the full project, not just one policy.
What to gather before requesting a builders risk quote
To help your advisor build an accurate quote, gather as much project information as possible before summer work begins.
Helpful details may include:
- Project address
- Type of project
- New construction, remodel, or installation work
- Total completed project value
- Estimated start and completion dates
- Project plans or scope of work
- General contractor information
- Subcontractor information
- Owner or developer information
- Lender requirements
- Materials used
- Site security details
- Distance to fire protection
- Whether materials will be stored off-site or transported
- Any special exposures, such as temporary structures, scaffolding, or pollutant cleanup needs
The more complete the information, the easier it is to structure coverage around the actual project.
Before you break ground, review the risk
Summer construction season can move fast. Once crews are scheduled, materials are ordered, and deadlines are set, insurance can feel like one more item on a long checklist.
But builders risk coverage should not be an afterthought.
A project represents a major investment of time, money, materials, and labor. Whether you are building from the ground up, remodeling an existing structure, or managing a commercial or municipal project, the right coverage can help protect that investment while the work is underway.
Leavitt Great West works with Montana contractors, property owners, developers, and construction businesses to review project risks and help tailor insurance coverage to the job.
Before the season gets busier, take time to review your builders risk coverage, project contracts, limits, covered parties, exclusions, and timeline.
A short conversation before construction starts can help prevent a much bigger problem after a loss.
Have questions about builders risk insurance?
If you are planning a construction project in Montana, Leavitt Great West can help you review your risks and explore builders risk insurance options for your project.
Contact Leavitt Great West today to talk through your upcoming project and make sure your coverage is ready before summer construction season is in full swing.
