Understanding Construction and Homeowners Insurance Differences

builders risk policy vs homeowners insurance

If you are a general contractor or real estate developer, you have probably wondered about builders risk policy vs homeowners insurance. A builder’s risk policy insures against the property loss on new construction projects. Homeowners insurance is designed to provide coverage to the insured’s items and his or her property.


When it comes to a building that is being renovated or under construction, a builder’s risk policy is a valuable asset on the site. Types of construction projects can include remodeling or additions to

Custom houses
Modular homes
Tract structures
Commercial buildings

A builders risk policy vs homeowners insurance differs greatly for on-site building materials. On-site materials, fixtures, copper tubing, and supplies are all covered by a builder’s risk policy, not the homeowners. Even temporary scaffolding and shoring are covered with a builder’s risk insurance.


Neither type of insurance policy will cover the illegal acts or thefts of employees, natural disasters, or error in architectural design unless specifically stated in an added clause. The breakdown of machinery, employee accidents, and neighborhood kids pranking the site with spray paint are not covered either.
If you have any questions about the builder’s risk policy vs homeowners insurance, give your insurance company a call and request a quote explaining the differences. Your agent is the best source of information about professional building insurance.