By Patrick Turcotte, COO, Docutrax. Last reviewed: 27 August 2026.

Builders risk insurance is first-party property coverage on a construction project while it is being built. It pays for direct physical loss or damage to the structure, materials and equipment that will become part of the work. It does not cover injury or damage to a third party's property, and it ends earlier than most parties expect.

Most published material on builders risk is written for the party buying the policy. This guide is written for the party that has to verify it: the general contractor confirming what the owner actually purchased, the compliance team deciding whether a certificate answers the question in front of it, and the subcontractor trying to establish whether it is protected by a policy it never saw.

What does builders risk insurance actually cover?

Builders risk covers direct physical loss or damage to the project during construction. The same coverage is sold as course of construction insurance and as builders all risk, and the terms are used interchangeably in the market. Covered property typically includes the building or structure under construction, and the materials, supplies, machinery and equipment intended to become a permanent part of it.

The exposure is real and concentrated. Fire departments in the United States responded to an estimated average of 4,300 construction site fires each year between 2016 and 2020, causing an average of five civilian deaths, 62 civilian injuries and $376 million in direct property damage annually, according to NFPA research (NFPA, Fires in Structures Under Construction). Across more than 13,000 engineering and construction insurance claims analysed over the preceding five years, fire and explosion accounted for 27 percent of claim value (Allianz Global Corporate & Specialty, August 2019).

One structural point matters before any of the detail. The ISO Builders Risk Coverage Form, CP 00 20, currently at the 10 12 edition, contains no causes of loss of its own. Both its coverage section and its exclusions section read "See applicable Causes of Loss Form as shown in the Declarations." A separate causes of loss form has to be attached, and it can be Basic (CP 10 10), Broad (CP 10 20) or Special (CP 10 30). Special form is the market norm, and it is what produces the "all risk" description, but it is a choice made on the declarations page rather than something built into builders risk by definition.

Second point, equally important for anyone reading a policy rather than a summary: the ISO commercial property form is the benchmark, not the majority. Most builders risk written in the United States is placed on inland marine forms (IRMI). The ISO wording quoted throughout this guide is the reference point every carrier form is measured against. It is not a description of the specific policy on any given project.

Who buys builders risk, and who is insured under it?

Under the AIA documents, the Owner is the default purchaser. A101-2017 Exhibit A, the Insurance and Bonds Exhibit, states at Section A.2.3.1 that unless the obligation is placed on the Contractor pursuant to Section A.3.3.2.1, the Owner shall purchase and maintain property insurance (AIA A101-2017 Exhibit A). The required coverage is written "on a builder's risk 'all-risks' completed value or equivalent policy form and sufficient to cover the total value of the entire Project on a replacement cost basis."

ConsensusDocs 200 runs the opposite way. Section 10.3.1 places the builders risk obligation on the Constructor, and the Owner's purchase of the coverage is an election at Section 10.3.3. Two widely used form contracts, two opposite defaults. This is the first thing to establish on any project, and it is established from the executed contract, not from an assumption about industry practice.

The insured-status question is where builders risk diverges most sharply from general liability, and where most published material goes quiet. AIA A101-2017 Exhibit A Section A.2.3.1 requires that the insurance "shall include the interests of the Owner, Contractor, Subcontractors, and Sub-subcontractors in the Project as insureds." The words "as insureds" were added in the 2017 edition. The 2007 general conditions had required only that the insurance "include the interests of" those parties, without saying in what capacity.

Note what the AIA language does not say. It does not say "named insureds" and it does not say "additional insureds." IRMI has flagged this directly: the documents designate these parties as insureds rather than named insureds, and the implementation is left to the policy (IRMI, Builders Risk: Naming of Insureds Reloaded). For a compliance team, the operational consequence is precise. On a general liability policy the status to verify is additional insured status, conferred by endorsement. On a builders risk policy the status to verify is insured status, and it is conferred by how the policy is written, not by a box on a certificate. Mortgagees, separately, are covered as loss payees under the AIA requirement, which is a third status again.

There is also a remedy most parties never look for, because it does not live where they are looking. If the Owner fails to purchase the required property insurance, the consequence sits in A201-2017 Section 11.2.2, not in the Insurance and Bonds Exhibit. The Owner must inform the Contractor in writing before commencement of the Work. If the Owner fails to procure coverage, the Owner waives claims against the Contractor, Subcontractors and Sub-subcontractors to the extent the loss would have been covered. If the Owner gives no written notice and the Contractor is damaged by the failure, the Owner reimburses the Contractor for all reasonable costs and damages attributable thereto (Amundsen Davis; Kegler Brown). A party working only from the Exhibit will not find that remedy.

How is builders risk different from general liability?

They answer different questions, and they pay different people.

Builders risk is first-party coverage. It pays the insureds for physical damage to the work itself. If a fire destroys a partially built structure, builders risk is what funds the rebuild.

General liability is third-party coverage. It responds when the insured is legally liable for bodily injury or property damage to someone else. If the same fire spreads to a neighbouring building, general liability is the policy in question, and builders risk has nothing to say about it. Builders risk does not respond to a worker's injury, and it does not respond to a claim by an adjacent property owner.

An installation floater is a third thing again. It is inland marine coverage on property, usually equipment and materials, being installed by a contractor (IRMI). It covers one contractor's own scope, typically extending to transit and off-site storage as well as the jobsite. IRMI treats it as a specialised type of builders risk often written on the same form family, so the contrast should not be overstated: the differences that matter are the insured, the insurable interest and the property covered, not the peril structure.

When does builders risk coverage end?

This is the question the ranking pages on this topic answer least well, and it is the one most likely to produce an uninsured loss. Under the ISO Builders Risk Coverage Form, coverage ends when the first of a list of events occurs. Section F.4 of CP 00 20 states that the insurance ends when one of the following first occurs: the policy expires or is cancelled; the property is accepted by the purchaser; the insured's interest in the property ceases; the insured abandons the construction with no intention to complete it; or, unless the insurer specifies otherwise in writing, 90 days after construction is complete, or 60 days after any building described in the declarations is occupied in whole or in part or put to its intended use.

Read that carefully, because it contains two separate clocks running on different triggers. Ninety days runs from completion. Sixty days runs from occupancy or intended use. The 60-day clock is the one that bites in practice, and it starts when the building is occupied in whole or in part. Partial occupancy of one floor starts a 60-day countdown on the whole building. On a phased handover, the coverage on the parts still under construction can expire while work is continuing on them.

The meaning of completion has already been litigated, though in an adjacent context. In Luke, Inc. v. Berkley National Insurance Co., 2025 WL 2210783 (W.D. Tenn. 2025), an unreported federal district court decision, the court construed the trigger of a delay in completion coverage part rather than a termination provision, and held that completion of a project occurs when construction of the physical structure is achieved and not on operational readiness. Nothing was left to be constructed, erected, fabricated or installed, and a pending inspection required for licensure did not keep the project incomplete, so the delay claim failed (reported by Cozen O'Connor, August 2025). The holding is not about when coverage ends. But completion is what the 90-day clock runs from, and that is the reading of completion a court has already adopted.

The AIA documents treat early occupancy as its own insurance event. A101-2017 Exhibit A carries a dedicated Section A.2.3.2, "Occupancy or Use Prior to Substantial Completion," and a further Section A.2.3.1.3 addressing coverage after Substantial Completion. The drafters separated these out because the transition from builders risk to permanent property insurance is where coverage gaps are made. That transition is a compliance handoff, and it needs a date in a system, not an assumption that someone will remember.

What does the waiver of subrogation on the builders risk policy do?

The parties give up their own rights of recovery against each other, and because an insurer's subrogation right is no greater than its insured's, the property insurer loses the right to recover from the parties named after it has paid the claim. The direction matters and it is commonly stated backwards.

Under AIA A201-2017 Section 11.3.1, the Owner and Contractor waive all rights against each other and any of their subcontractors, sub-subcontractors, agents and employees; against the Architect and the Architect's consultants; and against Separate Contractors and their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other causes of loss, to the extent those losses are covered by property insurance required by the Agreement or other property insurance applicable to the Project, except as to their rights to the proceeds of that insurance (AIA).

Two further sentences in the same section do real work. The Owner or Contractor, as appropriate, must obtain similar written waivers in favour of the same parties from the Architect, the Architect's consultants, Separate Contractors, subcontractors and sub-subcontractors. And the policies purchased by each party agreeing to waive must not prohibit the waiver. That second requirement is a verifiable coverage condition, not a contractual formality, and it is one a policy review can actually check.

The 2017 edition also changed the scope language. The 2007 general conditions waived rights to the extent losses were covered by property insurance "applicable to the Work." The 2017 section reads "applicable to the Project." That single word sat at the centre of a long-running split in the courts.

This waiver is not the general liability waiver and it is not the workers compensation waiver. Three separate waivers, three separate policies. The builders risk waiver is on the property policy. The general liability waiver is ISO CG 24 04. The workers compensation waiver is NCCI's WC 00 03 13, and in states that use their own bureau forms the number differs; Texas, for example, uses its own WC 42 03 04. A contract requiring "a waiver of subrogation" without specifying which policies it applies to has not actually specified anything, and a certificate showing a waiver against the general liability policy establishes nothing about the property policy.

How far the waiver reaches

Courts have split. One line reads the waiver's reach from which policy paid, so it extends to non-Work property where the policy that responded covered it. The other reads it from what property was damaged, limiting it to the Work.

The Indiana Supreme Court set out both sides at length in Board of Commissioners of the County of Jefferson v. Teton Corp., 30 N.E.3d 711 (Ind. 2015), adopting the "any insurance" approach and barring a subrogation claim for non-Work courthouse fire damage because the county's pre-existing all-risk policy covered both. On the other side, Copper Mountain, Inc. v. Industrial Systems, Inc., 208 P.3d 692 (Colo. 2009), held the waiver reaches only damage to the contractually defined Work, reasoning that the broader reading would render the contract's separate liability insurance requirement meaningless. New York reached a similar result in S.S.D.W. Co. v. Brisk Waterproofing Co., 76 N.Y.2d 228 (1990).

Read the clause, not the form number

The most instructive recent decision on the 2017 form, handed down in December 2024 by an Ohio appellate court, makes the operational point better than any general statement could. In Hartford Fire Insurance Co. v. DeBra-Kuempel Inc., 2024-Ohio-5830 (Ohio Ct. App. 1st Dist. Dec. 13, 2024), the court held that the Section 11.3.1 waiver did reach a subcontractor not in privity with the owner. It then held the waiver was limited to damage to the Work, because the parties' contract contained a sentence saying so. The court noted that the version of Section 11.3.1 at issue in the cases making up the national split did not appear to contain the qualification present in this contract, and held at paragraph 32 that by agreeing to language limiting the scope of the waiver to damages to the Work itself, the owner had "contractually incorporated the minority view."

That sentence was not stock AIA language. Someone put it there, and it decided the case. Verifying that a project uses "the AIA form" establishes nothing about what the waiver in that project's contract actually says.

Where there is no express waiver

Whether the property insurer can pursue a subcontractor then turns on whether that subcontractor is an insured. The rule that an insurer cannot subrogate against its own insured is not seriously disputed. North Star Reinsurance Corp. v. Continental Insurance Co., 82 N.Y.2d 281 (1993), states it plainly: an insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered. What is disputed is whether an unnamed subcontractor is an insured at all.

South Tippecanoe School Building Corp. v. Shambaugh & Son, Inc., 395 N.E.2d 320 (Ind. Ct. App. 1979), held subcontractors were intended insureds under an AIA-based builders risk requirement and barred subrogation. Eighteen years later the same court allowed subrogation in Indiana Erectors, Inc. v. Trustees of Indiana University, 686 N.E.2d 878 (Ind. Ct. App. 1997), because the owner had expressly modified the standard insurance provisions, while conceding that on unmodified AIA language the subcontractor would indeed have been an intended insured. Other courts have looked at the scope of the sub's insurable interest rather than at status in the abstract; see Turner Construction Co. v. John B. Kelly Co., 442 F. Supp. 551 (E.D. Pa. 1976). Where the policy names subcontractors outright the question closes before it opens, as in Frank Briscoe Co. v. Georgia Sprinkler Co., 713 F.2d 1500 (11th Cir. 1983), where the policy named all subcontractors without qualification and the claim against the sub failed as a claim against a co-insured.

The practical reading for a compliance program is that insured status is the contested question, not the subrogation rule, and insured status is decided by the documents. Where a subcontractor's protection against the project's property insurer rests on an assumption rather than on a clause, that is an exposure sitting on the subcontractor.

One point runs against the intuition many risk managers carry over from indemnity. Anti-indemnity statutes in several states reach additional insured requirements, and a few reach waivers of subrogation. Kansas is the clearest example, and it is instructive: K.S.A. Section 16-1803(b)(3) voids provisions waiving subrogation rights for losses covered by liability or workers compensation insurance in private construction contracts, and K.S.A. Section 16-1903(b)(3) does the same for public ones (Kansas Office of Revisor of Statutes). By its own terms neither reaches property insurance, which is what a builders risk waiver is. Montana approaches it from the other side: its anti-indemnity statute says nothing about subrogation, and expressly carves out a contract provision requiring a party to purchase a project-specific policy including builder's risk insurance (Mont. Code Ann. Section 28-2-2111(2)(b)). Enforceability of any particular clause is a question of that state's law and that contract's wording, and nothing here is a legal opinion on either.

What do the standard exclusions leave uncovered?

Builders risk written on ISO Special form is broad, and the exclusions that matter are the ones a construction team is most likely to trip over.

Faulty workmanship, design and materials. CP 10 30, currently at the 09 17 edition, excludes at Section B.3.c loss caused by faulty, inadequate or defective planning, zoning, development, surveying and siting; design, specifications, workmanship, repair, construction, renovation, remodeling, grading and compaction; materials used in repair, construction, renovation or remodeling; and maintenance.

What the ensuing loss carve-back actually restores. Section B.3 carries an exception: if an excluded cause listed in B.3 results in a Covered Cause of Loss, the policy pays for the loss caused by that Covered Cause of Loss. It restores the consequence. It does not restore the cost of correcting the defective work. The Eighth Circuit put the test cleanly in Bob Robison Commercial Flooring, Inc. v. RLI Insurance Co., No. 23-3531 (8th Cir. Mar. 19, 2025), construing comparable wording on a builder's risk installation floater under Arkansas law: an ensuing loss clause is only triggered when one excluded peril results in a distinct covered peril, meaning there must be two separate events. Defective gym floor painting "was itself the peril," and the whole removal and replacement cost was excluded. The Fourth Circuit reasoned similarly in Taja Investments LLC v. Peerless Insurance Co., 717 F. App'x 190 (4th Cir. 2017) (unpublished), requiring an independent or fortuitous intervening cause. The counterweight is Vision One, LLC v. Philadelphia Indemnity Insurance Co., 174 Wn.2d 501, 276 P.3d 300 (2012), where the Washington Supreme Court held en banc that a collapse caused by faulty shoring was a covered ensuing loss because the resulting loss was not itself excluded.

Note also that the form carries a second, narrower carve-back at Section B.2.d, which restores only a "specified cause of loss" or building glass breakage. The two exceptions are not interchangeable, and which one applies depends on which exclusion is in play.

The defects wording is negotiable, and the tier decides the outcome. On non-ISO and London-market placements, the defects exclusion is usually one of the LEG clauses. The ladder runs from broadest exclusion to narrowest:

The London market DE clauses, DE1 through DE5, run a parallel ladder from DE1 (narrowest coverage) to DE5 (broadest). The two ladders are parallel but not interchangeable, and named market sources disagree on how the middle rungs map to each other, so treat a claimed equivalence between a LEG tier and a DE tier as something to check in the wording rather than assume. LEG 3 has been construed in two recent decisions, both at district court level and neither appellate: South Capitol Bridgebuilders, LLC v. Lexington Insurance Co., 2023 WL 6388974 (D.D.C. Sept. 29, 2023), and Archer Western-De Moya Joint Venture v. ACE American Insurance Co., 2024 WL 1250179 (S.D. Fla. Jan. 12, 2024), both reading the "improvement" language as ambiguous.

Theft is a limitation, not an exclusion, and the distinction is operational. Theft is not excluded under CP 10 30. It is cut back by Limitation C.1.d, which removes coverage for theft of building materials and supplies not attached as part of the building or structure. Materials sitting on site awaiting installation are the exposure. Once attached, the limitation does not apply. ISO CP 11 21, Builders Risk Theft of Building Materials, Fixtures, Machinery, Equipment, is the endorsement that buys the coverage back. Separately, Limitation C.2.c restricts builders' machinery, tools and equipment owned by or entrusted to the insured to specified causes of loss and switches off the usual 100-foot exception where the premises is insured under the Builders Risk Coverage Form, but it operates only on property that is covered property to begin with, and portable tools fail CP 00 20's requirement that covered property be intended to be permanently located in or on the structure.

Water. CP 10 30 Section B.1.g excludes flood, surface water and water backing up from a sewer or drain. Non-weather water is the more common construction problem, and on the Special form it is generally covered rather than excluded. What shapes it is Section B.2.f, which excludes continuous or repeated seepage or leakage over a period of 14 days or more; Section B.2.g, which excludes leakage from plumbing, heating, air conditioning or other equipment caused by freezing unless heat is maintained or the equipment is drained; and Limitation C.4, which withholds the cost to repair the defect in the system or appliance itself while paying for the resulting water damage. Water damage was the third most frequent driver of construction losses during the first three quarters of 2021, accounting for 11 percent of claims received and ranking fifth by cost, according to AGCS claims analysis, and in Allianz's 2026 analysis of 221 data centre claims it was the most frequent cause by claim count, although fire drove more than half the value (Allianz Commercial).

Collapse. CP 10 30 excludes collapse at B.2.k and gives limited coverage back through the Section D Additional Coverage. CP 00 20 Section F.3 then switches off part of that Additional Coverage, which is precisely why ISO CP 11 20, Builders Risk Collapse During Construction, exists as a separate endorsement.

One exclusion that is not there. There is no testing or commissioning exclusion in the ISO causes of loss form. Testing and commissioning exposure is a London market, manuscript and CAR/EAR construct, and on those forms it is addressed expressly, by exclusion, sublimit or buy-back endorsement. It should not be described as an ISO exclusion, and its absence from an ISO-based programme does not mean the exposure is covered.

What do soft costs and delay coverage do, and why is the sublimit the thing to check?

Section B.2.b of the Special form excludes delay, loss of use and loss of market. That exclusion is the reason a separate insuring agreement exists.

Soft costs coverage responds to the continuing development and carrying expenses a project incurs during a delay caused by covered physical damage. Typical items include construction loan interest, real estate taxes, advertising and promotional expenses, the cost of renegotiating leases or construction loans, additional insurance premiums, the rental of construction equipment, and similar project carrying costs (IRMI).

Soft costs are not business income. Soft costs pay the expenses that keep running. Business income and rental value pay the revenue the finished project would have earned. They are not mutually exclusive, and soft cost coverage alone provides incomplete indemnification (Adjusters International). The related coverage sold as delayed completion, delay in start-up, delayed opening or advance loss of profits is the same family of protection under different market names (IRMI).

Both are triggered by covered physical damage. Neither responds to delay caused by supply chain, labour availability, weather that produced no covered damage, or the time taken to rectify a defect that produced no covered damage. That trigger is the first thing to establish when a schedule slips.

Two structural features decide what actually gets recovered, and neither appears on any certificate:

A separate sublimit. Soft costs sit under their own limit, materially smaller than the physical damage limit. In one claim IRMI discusses, soft costs were limited to $3.3 million against a $33 million physical damage limit.

A waiting period rather than a dollar deductible. Soft costs deductibles are commonly expressed in days or weeks rather than dollars, which IRMI flags as a material reducer of recovery.

For scale on what delay disputes cost once they are contested, Arcadis reported an average North American construction dispute value of $60.1 million and an average dispute length of 12.5 months on 2024 data (Arcadis, 15th Annual Construction Disputes Report, 2025).

How do you verify builders risk, and what can a certificate show?

Start with a fact that surprises most compliance teams: ACORD publishes no certificate or evidence form for builders risk. Its only builders-risk-specific form, ACORD 147, Installation/Builders Risk Section, is an application section attached to the commercial insurance application. It is not a form a third party is issued.

Builders risk is therefore evidenced on the general property forms. This is the first place verification goes wrong, because the form that arrives is often the wrong one entirely.

An edition note worth knowing before someone flags it as a problem: ACORD 25 was reissued as 2025/12 and the 2016/03 edition has been removed from New York's approved list, while the three property forms were not reissued and remain at 2016/03. A 2016-edition property certificate arriving alongside a 2025-edition liability certificate is normal.

The ACORD 28 carries materially more information than the 24. It has a coinsurance field with a percentage, replacement cost and agreed value indicators, and an Additional Named Insured(s) section. The 24 has none of those. Both carry a deductible field. A programme that accepts a 24 for builders risk is accepting less information than the form family is capable of carrying, for no reason.

What neither form can show, because no structured field exists for it:

• Whether subcontractors are insureds under the policy

• The termination triggers, and therefore the date coverage actually ends

• The soft costs or delay sublimit, and the waiting period attached to it

• The exclusions, including which defects wording tier applies

• On the 24 specifically, coinsurance and the valuation basis

The forms say as much themselves. Every one of them carries the information-only language and the statement that the document "DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW." All four carry an AUTHORIZED REPRESENTATIVE signature block, which is the producer's representative; none of them carries an insurer signature line. And the cancellation wording on all four states that notice "WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS," which commits the insurer to nothing running to the holder. The older "endeavor to mail" language was removed in ACORD's 2009 editions and is not current.

There is also a limit on what can legitimately be asked of the producer issuing the form. The Texas Department of Insurance states in its certificates guidance that a certificate cannot say anything that is not the same as what is stated in the insurance policy (Insurance Code Section 1811.051), and that a certificate holder cannot require an agent to provide certification of insurance coverage that is not available in the line or type of insurance coverage referenced on the form (Insurance Code Section 1811.102). Texas rules go further and provide that a certificate may not alter or modify a certificate form the department has approved unless the department approves the alteration (28 Tex. Admin. Code Section 5.9376). Asking a broker to write a termination trigger onto an ACORD 24 is not a solution to the gap.

None of this makes certificate review the wrong tool. Where the approved requirements and the relationship's inherent exposure do not call for deeper analysis, a properly reviewed certificate is a proportionate answer and it does real work: as of its issue date it evidences that a policy exists, who the first named insured is, the term, the limits as reported, and the deductible. The question is never whether certificates matter. It is whether the depth of review matches the requirements and the exposure. On builders risk specifically, the contract usually requires things the form has no field for, which is what shifts the answer.

What should the compliance file hold on a project's builders risk?

Where the contract requires insured status for named parties, requires a waiver of subrogation on the property policy, or sets soft costs and delay requirements, the certificate cannot answer those questions and the underlying documents have to. A file built to survive a loss holds the following:

The policy, or at minimum the declarations with the endorsement schedule. The termination provision, the insured status of each party, and the defects wording tier all live there and nowhere else.

Confirmation of insured status for every party the contract names, in the capacity the contract requires, rather than an assumption that "the AIA form covers subs."

The waiver of subrogation as it actually reads in the executed contract, not the form number. DeBra-Kuempel is what happens when the difference goes unchecked.

The termination triggers, converted into diarised dates. The 60-day occupancy clock and the 90-day completion clock both need owners and both need a date in a system before partial occupancy happens, not after.

The soft costs and delay sublimits and their waiting periods, recorded separately from the physical damage limit.

The deductible, and a record of which party bears it under the contract.

The valuation basis. Under the ISO form, Section E.6 values loss at actual cash value as of the time of loss, with no replacement cost option in the form itself, while market inland marine builders risk forms are commonly replacement cost. These produce very different outcomes on the same loss.

A current check that the limit still matches the contract sum. CP 00 20's Additional Condition F.2, "Need For Adequate Insurance," pays no greater share of a loss than the proportion the limit bears to the value on the date of completion, not the value on the date of loss. Change orders that never made it back into the insurance limit can create a penalty on a loss occurring early in the build, which is a mechanism almost nobody monitors.

This is the work Docutrax does. Licensed insurance professionals and CRIS-certified Account Managers review the documents, identify where the coverage in place does not match what the contract requires, and work with the third party and its broker or agent to resolve the gap. Docutrax has completed more than 300,000 forensic policy reviews since 2017. The client sets the requirements and makes the decisions; Docutrax surfaces the facts, documents them, and resolves the deficiency so the risk stays with the party that owns it.