What Builder's Risk Insurance Covers
Builder's risk insurance — sometimes called Course-of-Construction (COC) insurance — covers physical damage to a commercial property during the construction period. Coverage typically includes:
- The building under construction (structure and improvements)
- Materials, fixtures, and equipment on site
- Materials in transit to the site
- Sometimes temporary structures (scaffolding, fences, hoists)
- Sometimes soft costs (architect fees, permit fees, financing carry)
Builder's risk does NOT cover liability to third parties (general liability), worker injuries (workers comp), tools owned by contractors, or post-construction stabilized property (that's standard commercial property insurance).
Florida-Specific Considerations
Hurricane & Wind Coverage
Florida builder's risk policies must address named storm coverage carefully. Many carriers exclude wind during certain construction phases (e.g., before the roof dries-in); others include wind but with high deductibles. Confirm specific wind terms before construction begins, particularly during hurricane season (June 1 – November 30).
Flood Coverage
Builder's risk typically excludes flood — separate flood coverage required, often through NFIP or private flood carriers. Critical for coastal and floodplain-located construction projects.
Theft & Vandalism
Construction sites are exposed to theft of materials, copper, and equipment. Florida coverage typically includes theft but with specific perimeter security and reporting requirements.
Lender Requirements
Construction lenders require builder's risk as a condition of every construction loan. Typical requirements:
- Coverage equal to full completed value (hard costs + soft costs)
- A-rated carrier (A.M. Best) or higher
- Specific named insured language including the lender as mortgagee
- Maximum named storm deductibles (typically 5%)
- Soft cost coverage in some cases
- Specific cancellation notice provisions
Premium Drivers
- Project value — Higher hard cost = higher premium
- Construction type — Wood frame more expensive than concrete/masonry
- Location — Coastal > inland; coastal premiums can be substantial
- Construction duration — Longer build = higher premium and more renewal exposure
- Carrier and rating environment — Florida insurance market has tightened materially
Frequently Asked Questions
What does builder's risk insurance cover?
Builder's risk insurance covers physical damage to a commercial construction project during the construction period — including damage from fire, theft, vandalism, wind, hail, and certain other perils. It typically covers the building under construction, materials on site or in transit, and sometimes temporary structures. It does NOT cover liability to third parties (that's general liability) or worker injuries (that's workers comp).
Why is builders risk insurance expensive in Florida?
Florida builders risk is materially more expensive than most other states due to hurricane and named storm risk. Premiums vary by project value, construction type, location (especially proximity to coast), construction duration, and the carrier's specific underwriting. Premiums have increased materially during the broader Florida insurance crisis.
How much builders risk insurance do I need?
Coverage must equal the full completed value of the project — including hard costs, soft costs, and (in some cases) anticipated rental income during construction. Underinsurance triggers co-insurance penalties that reduce claim payouts. Confirm coverage amounts with both your lender (which has specific requirements) and your insurance broker.
Who can help me coordinate builders risk for a Florida construction project?
Michael R. Linton at Linton Global Solutions coordinates with leading commercial property insurance brokers active in Florida construction as part of every construction-financed transaction. Call (312) 612-1031 to discuss your project.
Article Summary
Builder's risk insurance is required by all commercial construction lenders and covers physical damage to projects during the construction period. Florida builder's risk is materially more expensive than most states due to hurricane risk, and includes specific named storm coverage considerations that must be confirmed before construction begins. Coverage must equal full completed project value to avoid co-insurance penalties. Linton Global Solutions coordinates with leading Florida construction insurance brokers as part of every construction-financed transaction.
Key Takeaways
- ✓Builder's risk covers physical damage during construction — required by all construction lenders.
- ✓Florida builder's risk is materially more expensive than other states due to hurricane risk.
- ✓Named storm coverage terms vary by carrier and construction phase — confirm specifically.
- ✓Flood is typically excluded — separate flood coverage required for coastal/floodplain projects.
- ✓Coverage must equal full completed value including hard + soft costs.
- ✓Wood frame construction more expensive to insure than concrete/masonry.
- ✓Coastal premiums substantially higher than inland.
- ✓Lenders require A-rated carriers and specific named insured / mortgagee language.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving 500+ banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
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Schedule a Free ConsultationWorks Cited
- Florida Office of Insurance Regulation. "Florida Insurance Regulatory Reports." Florida OIR, https://floir.com/. Accessed Jul 20, 2026.
- Insurance Information Institute. "Builder's Risk Insurance Research." III, https://www.iii.org/. Accessed Jul 20, 2026.
- International Risk Management Institute. "Builder's Risk Coverage Resources." IRMI, https://www.irmi.com/. Accessed Jul 20, 2026.
- American Institute of Architects. "Insurance & Construction Resources." AIA, https://www.aia.org/. Accessed Jul 20, 2026.
- Associated General Contractors of America. "Construction Industry Insurance Resources." AGC, https://www.agc.org/. Accessed Jul 20, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.