How do I file a claim under a builder's risk policy?

Report the loss immediately to your insurer, document all damage with photos and receipts, provide detailed project information, and cooperate fully with the claims process.

Your trusted Colorado and Utah insurance advisor, providing expert claim guidance and local support.

Complete Guide to Filing a Builder's Risk Insurance Claim

Why This Question Matters for Colorado and Utah Residents

Construction projects in Colorado and Utah face risks from severe weather, theft, vandalism, and unexpected events that can delay or derail your schedule. Knowing the correct steps for filing a builder's risk claim ensures your investment and timeline are protected when the unexpected strikes.

Regional weather extremes: Hail, wildfires, and flash flooding are major claim drivers, especially in Colorado's Front Range and Utah's Wasatch region.
Local claim regulations: Colorado law requires insurers to pay valid claims within 60 days, providing business owners with predictable timelines.
Project transitions: Builder's risk policies end when construction is complete and the property is occupied, requiring a seamless switch to permanent commercial property coverage.

What Most People Get Wrong

A common misconception is that all losses at a construction site—regardless of cause—are covered. In fact, standard builder's risk insurance excludes certain risks like flood unless added by endorsement. Another mistake is delaying notification, thinking damages can wait until project completion. But prompt reporting and clear documentation are absolutely essential for a successful claim.

Business owners also often miss the critical handoff from builder's risk to permanent property insurance, risking a dangerous coverage gap once the building is finished.

The Complete Picture

To file a claim under a builder's risk policy, immediately contact your insurer or agent as soon as you discover damage or loss—waiting can jeopardize your claim. Carefully document everything: take detailed, date-stamped photos, save receipts for repairs or materials, and write an account of the incident (what happened, when, and how it was discovered). Provide your insurer with comprehensive project details, including your construction schedule, proof of expenses, and any security/safety measures in place.

In Colorado and Utah, claim processing is subject to strict timelines—insurers must respond and pay valid building claims within 60 days of receiving all required documentation. Keep organized records and respond promptly to requests from adjusters. Finally, as your build nears completion, work with your independent agent to transition coverage to a commercial property policy to avoid any coverage gaps as your exposure shifts from builder's risk to operational risks.

Making the Right Decision for Colorado and Utah Residents

Question 1: Am I capturing the full extent of the loss with proper documentation?

Thorough, proactive documentation is the foundation of a successful claim:

Use your smartphone to take dated, high-resolution photos from multiple angles immediately after an incident.
Save all receipts, bids, and invoices related to repairs or replacements.
Keep a project journal tracking weather events, site security incidents, or interruptions—especially during high hail season in Colorado or wildfire season in Utah.

Question 2: Have I reported the claim quickly and provided complete information?

Time is critical—promptly notify your insurer and provide:

Detailed incident description (how, when, where)
All supporting documents and photos
Contact details for your contractor, architect, and key personnel

Delays can make it harder to prove the cause or full extent of loss, leading to denied or reduced claims.

Question 3: Am I prepared for the transition from builder's risk to permanent property coverage?

As your project nears completion or occupancy, coordinate with your insurance advisor to:

End the builder's risk policy on the correct date to avoid overpaying.
Start commercial property coverage to protect your now-operational building and its contents.
Review coverage options for business interruption and flood, especially after wildfires or in high-risk hail areas.

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Real World Examples

Denver Hailstorm Halts Midtown Office Build

Background: Jennifer was overseeing a $2.4M office construction project near Cherry Creek when a June hailstorm battered the exposed roof and electrical systems.

Coverage: Builder's risk policy with $2.5M limit, $5,000 deductible, and a hail endorsement.

Monthly Premium: $340/month ($4,080/year)

The Incident: 3-inch hailstones broke through the temporary roofing, causing $68,000 in damages to HVAC and wiring. Jennifer called her agent the next morning, took extensive photos, and saved repair receipts from licensed contractors.

Total Claim Cost: $68,000 (roof: $28,000, electrical: $35,000, cleanup: $5,000)

Jennifer's Cost: $5,000 (her policy's deductible—rest was fully covered)

"Having clear photos and the paperwork made the claim process fast—FoCoIns walked me through each step and the payment covered our contractors quickly. We finished just a few weeks behind schedule, not months."

Water Damage During Fort Collins Brewpub Build

Background: Mark was managing a new craft brewery buildout near Old Town when a burst pipe flooded the unfinished dining area during a cold snap.

Coverage: Builder's risk policy with $1.2M limit, $2,500 deductible, covering water damage from sudden pipe bursts.

Monthly Premium: $170/month ($2,040/year)

The Incident: Water soaked subflooring and some specialty bar fixtures, causing $22,000 in damages. Mark immediately notified his insurer, documented the damage with over 40 photos, and worked with his contractor to provide cost breakdowns.

Total Claim Cost: $22,000 (flooring: $10,000, fixtures: $8,000, labor: $4,000)

Mark's Cost: $2,500 (deductible—the remainder was covered)

"If I had waited to make the claim or lost any receipts, we'd have been out thousands. The thorough documentation meant FoCoIns got us approved in under three weeks."

Salt Lake City Fire Strikes New Retail Center

Background: Emily's construction company was building a strip mall in South Salt Lake when a fire—caused by welding sparks—damaged a partially finished section and destroyed stored materials.

Coverage: Builder's risk policy with $3M limit, fire coverage, and a $7,500 deductible.

Monthly Premium: $410/month ($4,920/year)

The Incident: The fire occurred after hours and affected framing, drywall, and installed lighting, resulting in $109,000 in losses. Emily's team immediately secured the site, notified their FoCoIns agent, and provided an incident timeline, building permits, and purchase receipts.

Total Claim Cost: $109,000 (framing: $48,000, drywall: $33,000, lighting/materials: $28,000)

Emily's Cost: $7,500 (deductible; insurer paid the rest)

"FoCoIns handled our claim with empathy and speed—even coordinated with local officials. Without coverage, this would have ended the project. Instead, we were able to meet our lease deadlines."

Avoid These Common Mistakes

Mistake #1: Waiting Too Long to Report the Damage

What People Do: Some policyholders wait days or even weeks to notify their insurer, thinking minor damage can be fixed later or reported at project completion.

Why It Seems Logical: Early-stage construction sites have frequent bumps, and people assume small mishaps aren't reportable.

The Real Cost: Delayed reporting can jeopardize your claim—insurers may deny coverage if not notified promptly. In Colorado and Utah, late claims could mean losing reimbursement for tens of thousands in repairs.

Smart Alternative: Always report losses immediately—even if you're still assessing the full scope. FoCoIns clients get hands-on guidance and streamlined claims filing for maximum protection and peace of mind.

Mistake #2: Failing to Document Damage Thoroughly

What People Do: Rely on memory or incomplete notes, snapping only a few photos or forgetting to save repair receipts.

Why It Seems Logical: Busy project schedules, multiple moving parts, and the pressure to keep building make detailed record-keeping feel unnecessary.

The Real Cost: Insufficient documentation can lead to denied or significantly reduced claims. Restoring a single construction phase often costs $10,000–$100,000—without receipts, you could end up paying most of it yourself.

Smart Alternative: Follow FoCoIns' checklist: take detailed, date-stamped photos, save all paperwork, and keep communications with your adjuster organized for a smooth, successful claim.

Mistake #3: Not Transitioning to Permanent Property Insurance After Completion

What People Do: Forget to switch from builder's risk to commercial property coverage once the project is finished and occupied.

Why It Seems Logical: Busy with inspections, move-in, or final payments, business owners miss the narrow window to change policies.

The Real Cost: This mistake creates a risky coverage gap—damage occurring after occupancy may not be paid, leaving owners on the hook for loss or liability (often $20,000 or more, depending on the incident).

Smart Alternative: Work with a local FoCoIns advisor who will proactively schedule the transition to permanent coverage, protecting your investment from day one of business operations.

FAQs On The Same Topic

Find answers to your most pressing insurance questions right here.

Do lenders require builder's risk insurance?

Yes, most lenders in Colorado and Utah require builder’s risk insurance before funding construction projects to protect their financial interest until the build is complete.

How does builder's risk insurance differ from permanent property insurance?

Builder's risk covers a building while it's under construction or renovation, protecting against damage before occupancy. Permanent property insurance takes over once construction is complete, covering the finished structure and ongoing operations.

What is testing coverage in builder's risk insurance?

Testing coverage in builder’s risk insurance safeguards against damage that occurs while new building systems—like HVAC or electrical—are being tested during construction. It’s critical for projects in Colorado and Utah facing complex system start-ups or severe weather risks.

Does builder's risk insurance cover subcontractors' work?

Yes, builder's risk insurance typically covers subcontractors’ work if they are listed in the policy, but always verify coverage specifics for your Colorado or Utah project.

Can I include coverage for flood or earthquake in my builder's risk policy?

Coverage for flood and earthquake is typically excluded from standard builder's risk policies, but many insurers offer these protections as add-ons or separate policies in Colorado and Utah. Ask about endorsements specific to your location's regional risks before starting your project.

Is theft by employees covered under builder's risk insurance?

Theft by employees is almost always excluded from builder's risk insurance. You'll need a separate fidelity bond or crime policy to get coverage for employee theft risks.

What are soft costs in builder's risk insurance?

Soft costs in builder's risk insurance include non-physical expenses such as interest, legal fees, lost rents, and permit costs that arise from construction delays due to a covered loss. In Colorado and Utah, adding soft cost coverage is essential to fully protect your building project from financial setbacks.

Do I need builder's risk insurance for renovation projects?

Yes, builder's risk insurance is strongly recommended for significant renovations or additions in Colorado and Utah to cover potential losses during construction. It bridges critical gaps left by standard property policies, especially in high-risk zones.

What is the difference between builder's risk and general liability insurance?

Builder’s risk covers property damage to the construction project itself, while general liability protects against third-party injuries or property damage resulting from construction activities.

Who should be named insured on a builder's risk policy?

All parties with a financial interest—usually the property owner, general contractor, and sometimes lenders or key subcontractors—should be named insureds on a builder's risk policy.