Builder's risk insurance, defined

The owner or the general contractor buys it; the contract says who. It runs from ground-breaking to occupancy or completion and ends on that date, so a delayed project needs an extension. Perils are usually open, with exclusions for earthquake, flood, faulty workmanship and design, and sometimes wind. Theft of materials and copper is a leading claim. Soft costs, such as extra interest and permit fees after a covered loss, are an optional add-on. A homeowner planning a large addition should check whether the home policy extends to the project; usually it does not, and this form is needed. Lenders require it before releasing construction funds.