Frequently Asked Question:

Who Buys Builder’s Risk Insurance on a Ground-Up Development, the Owner or the Contractor?

Insurance Type
Related Industries
Commercial Property Owners
Construction
Related Coverages
Builder’s All Risk
Commercial Property

The Short Answer

Either can, and the construction contract states which one does. On many development projects the owner or developer buys builder’s risk because the lender requires it and the owner holds the financial stake in the finished building, though some contracts shift it to the general contractor.

The Full Answer

Read the contract before anyone buys a policy. Standard owner-contractor agreements commonly place the property insurance duty on the owner, but heavily negotiated deals often move it. If neither party buys it, the project starts uninsured.

What the buyer needs to confirm:

Coverage period. The policy should run from the start of construction through completion, with room to extend if the schedule slips.

Soft costs and delay. Loan interest, permit fees, and lost rents during a delay usually need a specific endorsement.

Materials. Confirm coverage for materials in transit and stored off site.

The handoff. Permanent property coverage must start the moment the builder’s risk ends, including on partial occupancy, or the building sits uninsured.

Who is insured. The owner, lender, contractor, and subcontractors should all appear on the policy.

How Liberty structures your protection: We plan builder’s risk, the owner’s liability, and the permanent property program as one sequence. That keeps lender requirements met at every draw and prevents a gap between the last day of construction and the first day of occupancy.

Related Questions

Yes — restaurants process card payment data through point-of-sale systems daily, and a breach affecting customer payment information typically isn’t covered under general liability, which is why cyber liability is now considered standard for the industry.

A restaurant’s own commercial auto policy typically doesn’t cover an employee’s personal vehicle, so restaurants using employee-owned cars for delivery generally need hired and non-owned auto liability coverage.

Typically no — standard business interruption coverage is triggered by direct physical damage to the property, so a closure ordered for a health code violation alone usually isn’t a covered event unless it follows a covered loss.

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