What type of insurance safeguards the contractor in case of loss to a project before its completion?

Builders Risk Insurance is specifically designed to protect a contractor against loss or damage to a construction project while it is ongoing. This type of insurance covers physical loss or damage to the building under construction, along with its materials, fixtures, and equipment that are part of the project. It typically includes coverage for damages from a variety of risks such as fire, theft, vandalism, and certain natural disasters.

This coverage is crucial for contractors because it mitigates financial loss that could arise from unforeseen events that might occur before the project is completed. Without Builders Risk Insurance, a contractor could face significant financial hardship if the project sustains damage.

Other types of insurance, such as General Liability Insurance, primarily cover claims for bodily injury or property damage to others and do not specifically address losses on the construction site. Workers Compensation Insurance protects employees in case of work-related injuries or illnesses, while Property Damage Insurance pertains to issues concerning existing property, not the project in progress. Therefore, the nature of Builders Risk Insurance makes it the appropriate choice for safeguarding against losses during construction.