When Accidents Happen During Construction: Will Your Builder’s Risk Insurance Cover the Damage?

A builder’s “All Risk” insurance policy is the traditional way that the construction industry insures against damage to the work in progress during construction. Despite its common namesake, “All Risk” does not literally mean that all risks of loss or damage are insured. Critical and subtle differences in the forms of all-risk insurance policies can determine whether there is, or is not, insurance coverage for certain types of construction defects, accidents, and the damage resulting from such defects and accidents. There is no one standard form of builder’s risk insurance policy. Accidents and defects on major construction projects can cause tens of millions of dollars in damage. Given the high stakes, battles over builder’s risk insurance coverage can be expected in many cases. Unfortunately, most often the parties to a construction project do not understand the precise nature of the builder’s risk insurance policy until after a loss or damage occurs resulting in disputes and extended battles over insurance coverage.