A building under construction is not a building yet, and that is exactly the problem.
A commercial property policy covers a finished structure. A homeowners policy covers a completed home. Neither one responds while your project is framed, dried in, or waiting on a certificate of occupancy. Builders risk insurance covers that window.
What builders risk insurance actually is.
Builders risk is first-party property insurance. It pays for physical damage to the project itself — the structure, the materials, and the labor already invested in them.
It is not liability coverage. If someone is injured on your jobsite, that is general liability. If your framing package burns, that is builders risk. These two get conflated constantly, including on other agency websites, so it is worth being precise: a builders risk policy will not defend you against a third-party claim, and your general liability policy will not rebuild your project. You need both.
What a Texas builders risk policy typically covers.
- The structure under construction, including foundations, framing, and finished work in place
- Materials and supplies stored at the jobsite
- Materials in transit to the site and held at temporary off-site storage
- Temporary structures such as scaffolding, forms, fencing, and jobsite signage
- Debris removal following a covered loss
- Soft costs, including loan interest, real estate taxes, lost rental income, and extended general conditions caused by a covered delay
- Ordinance or law coverage, by endorsement, where a rebuild must meet current code
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Building or Structures Under Construction Coverage
Risk Factor
Your work-in-progress is a risk in the open. Damage from covered weather, vandalism, or other risks can slow or stop a project.
Solution
Building or Structures Under Construction coverage helps protect against damage to the building or structure being constructed from covered risks.
Materials and Supplies Coverage
Risk Factor
The materials and supplies you have on the job site are vulnerable to risks such as theft, fire, or other types of loss or damage.
Solution
Materials and Supplies coverage pays for the loss of covered materials and supplies used to complete the construction.
Equipment Coverage
Risk Factor
Your tools and equipment are of the utmost importance when building. Losing them to theft or damage could be a major problem.
Solution
Add Equipment coverage to protect valuable construction equipment used to complete the project from damage or other forms of loss.
Temporary Structures
Risk Factor
Weather, accidents, and other risks are potential dangers to temporarily erected structures that help you complete key projects.
Solution
Adding Temporary Structures coverage to your policy covers structures like scaffolding or signs from damage or other forms of loss.
Soft Cost Coverage
Risk Factor
There is often more at stake than what is at the construction site. Damages and delays can affect other parts of your business.
Solution
Soft Cost coverage helps with extra costs such as loan interest, lost sales income, rental income, real estate taxes, and more.
Tools and mobile equipment are normally covered under a contractors equipment floater rather than the builders risk policy. If you are relying on builders risk to protect a compressor or a skid steer, confirm it in the form rather than assuming.
How the limit is set.
Builders risk limits are written at completed value — the total value of the finished project including materials and labor, not the current value of work in place and not a percentage of the construction budget. Understating completed value can trigger a coinsurance penalty on a partial loss, and that is where most builders risk disputes begin.
Four exposures that drive Texas builders risk claims.
Hail.
Spring storm season moves across North Texas and the I-35 corridor every year, and a project that is framed and dried in but not yet roofed is fully exposed. Hail damage to sheathing, windows, exterior finishes, and stored materials is one of the most common losses we see on Texas projects. Check your policy for a separate wind and hail deductible, which is often a percentage rather than a flat dollar amount.
Freeze and water damage.
The February 2021 winter storm produced significant losses on Texas structures under construction — buildings with no heat, no occupancy, and pressurized supply lines. Many builders risk forms restrict or exclude water damage from freezing unless heat is maintained in the structure or the plumbing system is drained and shut off. Read that condition before winter, and put your cold-weather shutdown procedure in writing.
Named windstorm on the coast.
Projects in the state’s designated catastrophe area, which includes the coastal counties and part of Harris County, face percentage named-storm deductibles, and wind and hail are frequently excluded from the base policy entirely. Structures in that territory may also require windstorm certification, with inspections performed at specific phases during construction rather than after completion. Missing an inspection phase is expensive and slow to correct after the fact.
Theft.
Copper, HVAC condensers, appliances, and lumber leave unsecured jobsites regularly. Some carriers make fencing, lighting, or documented site security a condition of theft coverage. If your site is open, tell us before we market the risk rather than after a loss.
What builders risk does not cover.
- Flood and storm surge, which require a separate policy
- Earth movement, including subsidence and settling
- Faulty workmanship, design, or materials, though resulting damage from a covered peril may be covered depending on the form
- Injury to your employees, which is workers compensation
- Third-party bodily injury and property damage, which is general liability
- Wear and tear, mechanical breakdown, and contractual penalties for late delivery
- Theft by your own employees
Renovation, remodels, and tenant improvements.
Most builders risk material assumes ground-up construction, but a large share of Texas work is renovation. The critical question on a remodel is whether the existing structure is covered. Usually it is not, unless it is specifically added. A contractor renovating a fifty-year-old building who buys a standard builders risk policy has insured the new work and left the building itself uninsured. If you are doing tenant improvements, ask specifically how the policy treats the shell.
Installation floater coverage.
Subcontractors installing HVAC, electrical, plumbing, millwork, glass, or fixtures often need an installation floater rather than a full builders risk policy. It covers your materials in transit, at temporary storage, and at the jobsite until installation is complete and accepted, without insuring a structure you do not control. If you are a sub being asked to carry builders risk, an installation floater may be the correct and less expensive answer.
Who buys the policy, and when coverage ends.
Either the owner or the general contractor can carry builders risk, and the construction contract normally specifies which. What matters is that everyone with a financial interest — owner, general contractor, subcontractors, and lender — is properly named.
Coverage typically ends at the earliest of project completion, acceptance by the owner, occupancy, or policy expiration. The gap between builders risk ending and permanent property coverage attaching is a common and entirely avoidable exposure. So is a project that runs past its policy term: extensions are not automatic, and many forms limit how many times a term can be extended. If your schedule slips, call us before the expiration date, not after.
Builders risk insurance across Texas.
We write builders risk for projects throughout Texas from our office in downtown Houston. For market-specific detail, see our pages for Houston, Dallas-Fort Worth, Austin, and San Antonio.
Get a builders risk quote.
Most builders risk purchases are on a deadline set by a lender or a general contractor. Send us the project address, completed value, and construction dates and we will quote most Texas projects within one business day.
Frequently Asked Questions: Texas Builders Risk Insurance
Does builders risk cover my tools and equipment?
Usually not. Tools and mobile equipment belong on a contractors equipment floater. Some builders risk forms add limited equipment coverage by endorsement, but do not assume it is included.
Is builders risk insurance required in Texas?
There is no state law requiring it. It is required contractually — by lenders on nearly every financed project, and by owners in most commercial construction contracts.
Does builders risk include general liability?
No. Builders risk is property coverage for the project. General liability covers claims brought against you by third parties. They are separate policies.
Does builders risk cover hail damage to a roof under construction?
Generally yes, subject to your wind and hail deductible, which is often a percentage of the limit. Coastal projects may have wind and hail excluded entirely and written separately.
Does builders risk cover flood?
No. Flood and storm surge are excluded and require separate coverage — a real consideration on Gulf Coast and floodplain projects.
What happens if my project runs long?
Contact us before the policy expires. Extensions must be requested and approved, and some forms limit how many extensions are permitted.
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