Which term describes insurance specifically for a construction project to cover the building under construction?

• A. Builder's Risk
• B. Property Insurance
• C. Comprehensive Policy
• D. Hold-Harmless Agreement

Answer: (A)

During construction the main risk is the building and its materials while the project is not yet finished. Builder's Risk insurance is designed for this exact situation, providing coverage for physical damage to the structure under construction, as well as materials, equipment, and temporary structures on the job site. It typically protects against perils like fire, wind, theft, vandalism, and certain weather events, and can extend to materials in transit or in storage. The policy usually stays active from the start of construction through substantial completion or occupancy, with possible endorsements for additional risks or soft costs. This is different from property insurance, which covers a completed building or existing property rather than a work in progress; a comprehensive policy is a broad term not specific to construction, and a hold-harmless agreement is a liability waiver, not insurance coverage. Builder's Risk is the term that describes insurance specifically for a construction project to cover the building under construction.