Real Estate · Builder's Risk & Renovation

Builder's Risk and Renovation Insurance for the Construction Window

A standard property policy doesn't apply once construction begins. Builder's risk insurance covers the structure, materials, and soft costs during active construction. BLIS reviews your project type, insurable value, and ownership structure to help identify appropriate coverage.

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We only use this information to review your insurance request. BLIS is licensed in California, Nevada, Arizona, Texas, Florida. CA License 0M74955.

Submitting this form does not bind coverage and does not promise a specific quote, price, or coverage outcome. BLIS reviews submitted details and may follow up for information needed to evaluate the account.

What to expect

What to expect after you submit

A BLIS representative reviews the information you submit and follows up if something important is missing.

  1. A real person reads it

    Your details get read against what carriers actually want for your kind of account — not routed through a form stack.

  2. Your account gets matched

    How you operate maps to the coverage lines and markets that fit the risk.

  3. Gaps get filled

    If something important is missing, a few targeted questions — not another long form.

  4. Options get laid out

    Coverage, exclusions, carrier fit, and cost — side by side, not just price.

  5. Bound? We stay on.

    Certificates, endorsements, audits, renewals, policy changes — handled.

Prefer to talk it through? Call (818) 306-8333Monday – Friday, 9:00 AM – 5:00 PM PT

Your operation

How builder's risk operations shape the insurance review

Construction creates a window your existing property policy wasn't written for. Standard forms restrict or exclude coverage the moment material alteration begins. The permanent property policy isn't in place yet. Builder's risk — course-of-construction coverage — fills that window. It covers the structure, staged materials, and in-progress improvements while the project runs. Investors and developers who treat it as optional find out why it isn't at the worst possible moment: mid-project, after a loss. BLIS works through project type, insurable value, and how the policy fits alongside the GC's coverage — so the account is structured before the first wall comes down.

Your existing property policy likely has a construction exclusion. Vacancy clauses and material-alteration exclusions vary by carrier, but the pattern is consistent: active renovation compromises the coverage that was in place before work started. A gut renovation without builder's risk can leave you without a responding policy after a mid-project fire. That discovery comes at claim time — after the loss, not before.

Every builder's risk policy is written to a projected completed value. That number has to be defensible at inception. Underinsuring creates a coinsurance exposure — the carrier calculates coverage against what was declared, not what the project actually cost. On a renovation, the insurable value often includes the existing structure plus the cost of all improvements.

Getting the two components right at the start is part of the submission, not an afterthought.

Direct damage is only the first bill after a mid-construction loss. Architects have to be re-engaged. Permits have to be re-filed. Construction financing keeps accruing while the project sits. Deferred rental income adds to the total. Soft costs coverage is a policy extension for these categories — it is not included in the base builder's risk form by default.

If your project is debt-financed, the carrying cost of a delay is a real exposure worth evaluating before a loss, not during one.

Whose policy responds when the GC is involved? The answer depends on what the construction agreement says — and whether the actual policy matches it. Some contracts assign builder's risk responsibility to the GC. Others assign it to the owner. Where the contract says one thing and the policy says another, disputes follow losses.

Verify the actual policy in place, who carries it, and whether you're named before construction starts.

Scope and systems determine what markets will write your project. Carriers read structural renovation differently than cosmetic work. A project touching electrical, plumbing, or load-bearing systems attracts more underwriting scrutiny. Contractor qualifications matter here — a licensed GC with a documented track record opens more market paths than a self-managed project with uninsured subcontractors.

Occupied renovations narrow the field further; some markets won't write them at all.

Older buildings attract code-upgrade costs that exceed the direct repair. A fire that damages part of a 1960s building may trigger a permit requirement to bring adjacent undamaged systems into compliance. For a building with pre-code wiring, galvanized plumbing, or original HVAC, those upgrade costs can dwarf what it costs to repair the damaged area.

Ordinance or law coverage is the policy extension that addresses this. Without it, code compliance is your expense after a covered loss.

Materials off-site or in transit aren't automatically covered. Standard builder's risk attaches when materials arrive at the project location. Custom millwork, specialty HVAC, or imported fixtures stored at a supplier warehouse before delivery live outside that attachment point. An installation floater fills the gap.

For long-lead items with weeks between purchase and delivery, the exposure window matters — know where your coverage begins.

Substantial completion ends the builder's risk policy. The building must then move to a permanent commercial property form. That transition requires active planning. A lender financing the project will require evidence of the property policy at loan conversion. If the builder's risk policy runs out while the permanent policy hasn't been bound, the building sits uninsured.

Coordinating the timing, valuation basis, and lender documentation on that handoff is part of what BLIS handles.

Multiple renovation projects running simultaneously need a coverage structure that matches the pipeline. Some carriers offer blanket programs where new projects are added to a schedule and removed at completion. Others underwrite each project individually. A continuous acquisition pipeline doesn't fit a one-policy-at-a-time model well.

BLIS reviews the project volume and type to identify which program structure fits how you actually operate.

Coverage

Coverages commonly considered for builder's risk operations

These are common lines to evaluate, not a preset package. Your operations, current contracts, state requirements, and the carrier's policy forms determine the final program.

  • Builder's Risk (Course of Construction). The construction-period property policy. It covers the structure, on-site materials, and in-progress improvements against covered causes of loss

    fire, wind, water intrusion, vandalism, and where elected, collapse or earthquake. The limit must reflect the projected completed value, not the purchase price or the pre-renovation assessed value. This is a property policy, not a liability policy. It runs until substantial completion and does not carry forward as a permanent solution.

  • Soft Costs and Delay in Completion. A covered loss mid-project doesn't just damage materials

    it stops the clock. Re-engineering fees, permit costs, added financing interest, and deferred rental income accumulate while repairs happen. Soft costs coverage addresses those categories. It is not part of the standard builder's risk form; it must be elected and documented at inception. For projects financed with construction debt, the carrying cost of a delay is a separate exposure that deserves its own limit.

  • General Liability. Builder's risk responds to physical damage to the project. It does not respond to a third-party injury claim arising from construction activity. The GC often carries the primary GL covering site operations. An owner-developer who directs subcontractors directly, or who manages portions of the project without a GC, carries their own GL exposure during construction. Confirm the GC's GL names you as additional insured

    and verify it, rather than assume.

  • Ordinance or Law Coverage. Three-part extension for renovation projects in older buildings. Part A covers the loss in value to undamaged portions of the building when a covered loss triggers code compliance. Part B covers the cost to demolish and remove undamaged portions required by the building department. Part C covers the increased cost to rebuild to current code. Each part needs its own elected limit. The cost of code upgrades often exceeds the direct repair cost on pre-code structures

    without this extension, the difference is out of pocket.

  • Installation Floater / Off-Site Materials Coverage. Inland marine coverage that extends to materials, fixtures, and equipment stored off-site or in transit before they reach the jobsite. Builder's risk attaches when materials arrive at the project location. Long-lead items

    custom millwork, specialty mechanical equipment, imported finishes — can sit in transit or at a supplier warehouse for weeks. That window is unprotected without this coverage. For projects where purchase and delivery are separated by meaningful time, verify where the attachment point is.

  • Commercial Property (Transition / Completed Project). Builder's risk terminates at substantial completion. The building then needs a long-term commercial property form in place before that date

    not after. Lenders with a security interest require evidence of the permanent policy at loan conversion. A gap between the two effective dates is uninsured exposure. BLIS coordinates the valuation basis, timing, and lender documentation for the transition.

Quote factors

Common quote factors

These are the details that can shape eligibility, terms, and pricing. You don't need all of them to start — send what you have, and we'll follow up on anything important that's missing.

  • Project type: ground-up new construction, gut renovation, partial renovation, or tenant improvement. The type shapes both the coverage form and which markets are available. Ground-up construction runs longer and draws different markets than a partial interior renovation. Gut renovations expose the existing structure's conditioncarriers read that differently than new stick-frame from the ground up.
  • Projected completed value and scope of construction. Completed value is the primary rating basis. Carriers expect a defensible cost estimatematerials, labor, and soft costs — consistent with current construction benchmarks. A number that looks low relative to the building type or local market raises questions at submission. Bring the contractor's estimate, not a round figure.
  • Construction period and projected completion date. The policy term is defined at inception. A project that overruns needs a carrier extensionand carriers ask why when the request comes in. Bring a realistic timeline, not the most optimistic scenario. Projects with a history of extensions attract more scrutiny when requesting another one.
  • Contractor qualifications and licensing. A licensed GC with documented experience and a clean loss record opens more market paths. Carriers look at whether subcontractors are licensed and insured too. An owner-builder projectwhere you direct subcontractors directly without a GC — receives more underwriting scrutiny and may face a narrower field of markets.
  • Building age, construction type, and current condition. Older wood-frame structures, buildings with pre-code systems, or properties in poor pre-renovation condition affect appetite. Carriers look at fire protection, electrical panel age, and whether the renovation replaces major building systems. The condition of what you're starting with shapes how the renovation is underwritten.
  • Occupancy during construction. Vacant during renovation is the simplest underwriting picture. Partially or fully occupied renovation work adds habitational exposure on top of construction risk. Some markets decline occupied renovations outright. Know whether the building will be occupied before you approach the market.
  • Prior losses on the project or property. A recent fire, water event, or liability claim on the same property prompts underwriting questions. Loss runs for the propertynot just the project — give carriers the context they need before quoting.
  • Financing and lender requirements. Construction lenders name themselves as mortgagee or loss payee on the builder's risk policy. They may also specify minimum limits or required perils. Review the lender's requirements before bindinga policy that doesn't meet them can create compliance issues at the construction draw.

Illustrative scenarios

Example claim scenarios

A few situations that show how coverage can respond when something goes wrong. These are examples only — not actual claims, and not a guarantee of any outcome.

  • Example scenario

    Fire during framing on a gut renovation project

    An investor is completing a full gut renovation of a 1950s multifamily building. The interior is stripped to the studs. New framing, electrical rough-in, and insulation have been installed. A fire starts off-hours and burns through the newly framed upper floor. The existing property policy had been maintained, but the carrier disputes coverage. The building was under material alteration and effectively vacant.

    The investor hadn't placed a builder's risk policy for the construction phase. A builder's risk policy written for the course-of-construction period would have been the appropriate coverage, subject to its terms and exclusions.

  • Example scenario

    Water damage to installed materials during construction delay

    A developer is completing a mixed-use ground-up project. New drywall and flooring are installed on the first two floors. A winter storm causes water intrusion through roof sheathing not yet fully covered. The water damages installed finishes across both floors. Removal and replacement of those materials is required.

    The builder's risk policy, written to the projected completed value including installed improvements, can respond to the direct damage — subject to the policy's terms and exclusions. The developer also carries soft costs coverage. That coverage addresses a portion of the added engineering and rescheduling expenses.

  • Example scenario

    Theft of construction materials from a staging area

    A fix-and-flip investor stages purchased appliances, cabinetry, and light fixtures at the renovation property over a weekend. The property is unsecured and unmonitored. Over the weekend, the staged materials are taken. The builder's risk policy contains an off-premises extension for materials at the project site.

    But the materials were staged in a detached outbuilding the carrier did not agree to include as a covered location. A portion of the stolen materials may respond under the on-site materials coverage. The remainder may fall to the owner out of pocket, depending on the specific policy language and its terms and exclusions.

  • Example scenario

    Building code upgrade costs after a partial loss

    A property owner renovating a 1960s commercial building experiences a fire that damages a portion of the ground floor. The damaged area is rebuilt. But the local building department requires adjacent undamaged portions — containing original wiring and plumbing — to be brought up to current code as a condition of the permit. The cost of upgrading the undamaged portions exceeds the cost of rebuilding the damaged area.

    The property owner did not carry ordinance or law coverage. The code upgrade costs are paid entirely out of pocket. A builder's risk policy with ordinance or law coverage can respond to costs of this type, subject to the elected limits and the policy's terms and exclusions.

The claim scenarios above are illustrative examples only. They do not represent actual clients, actual claims, or guaranteed coverage outcomes. Coverage for any specific situation depends on the policy terms, conditions, exclusions, and the facts of the claim.

After you bind

Common certificate and service needs

After a carrier binds coverage, contracts and operational changes can create new documentation needs. A certificate summarizes policy information; the policy and its endorsements control coverage.

Contract and certificate requests

  • Lender mortgagee and loss payee certificates. Construction lenders require the builder's risk policy to name them in the correct capacity. The loan closing checklist specifies the required endorsement language. Review those lender requirements against the actual policy terms before closing day — not at the title company table.
  • Additional insured endorsements on the GC's GL policy. Where the GC carries primary GL for site operations, you typically need to be named as additional insured. The construction agreement specifies what's required. What the GC's actual policy provides may not match. BLIS reviews both sides of that equation.
  • Certificates for joint-venture partners, equity investors, and mezzanine lenders. Each party may specify required limits, covered perils, or endorsement language unique to their interest. Confirming those requirements against the active policy before issuing the certificate avoids a certificate that misrepresents what's actually in place.
  • Evidence of permanent property coverage at project completion. The lender requires a certificate reflecting the replacement-cost property policy before loan conversion. The builder's risk certificate alone isn't sufficient at that stage. Plan the documentation before the project reaches substantial completion — not the week of closing.
  • Owner certificates for construction contracts that run both directions. Not every certificate request flows from owner to contractor. Some construction agreements require the owner to provide evidence of coverage too. Review what the contract actually requires of you as the project owner, not just what you require of the GC.

Ongoing service

  • Policy extension requests when projects run past the original completion date. Builder's risk coverage terminates at the policy end date. Overruns require carrier approval of an extension — and that approval isn't automatic. Carriers ask for updated status and a revised completion estimate. Request the extension before the expiration date, not after the policy lapses.
  • Scheduled value updates when project scope expands. Adding a floor, expanding the footprint, or materially increasing the renovation budget creates exposure above the original declared value. The policy limit needs to reflect the revised scope. Let it sit unchanged and the added exposure is uncovered.
  • Policy-to-property transition at project completion. The builder's risk policy ends at substantial completion. The permanent commercial property policy needs to be in force before that date. BLIS manages the timing, coordinates the replacement-cost valuation basis with the property carrier, and confirms the lender's documentation requirements are met before the close.
  • Mid-term project additions for investors running multiple renovations. Portfolio programs may allow new projects to be scheduled in mid-term. Individual project policies may require separate placement for each new acquisition. BLIS coordinates which approach fits the volume and type of projects in the pipeline.
  • Occupancy change notification when the building's planned use shifts. A conversion from commercial to residential — or the reverse — may require a different coverage structure than what was placed at inception. The carrier needs to know before the change happens, not after. Material changes to the planned use of the building are something to bring to BLIS as soon as they're decided.
  • Claims questions and carrier coordination during the construction period. Documenting damage, assembling contractor estimates, and navigating coverage questions are areas BLIS supports. Claim adjudication and payment decisions sit with the carrier — BLIS helps with the questions that arise on your side of that process.
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Coverage availability, pricing, terms, conditions, and eligibility depend on underwriting, carrier guidelines, state, operations, loss history, policy terms, and other risk-specific factors. Nothing on this site guarantees coverage, pricing, placement, or savings.

Examples are hypothetical and illustrative. They show how a coverage can respond, not a promise that any specific claim will be covered. Actual coverage depends on your policy's terms, conditions, and exclusions.

Blue Lagoon Insurance Services, LLC is an independent insurance agency licensed in California (0M74955), Nevada (3983946), Arizona (3003332484), Texas (2966873), and Florida (L120266). BLIS does not underwrite insurance; coverage and underwriting decisions are made by the insurance carrier.