What perils are typically covered?

Complete Guide to Builder's Risk Insurance Peril Coverage

Why This Question Matters for Colorado and Utah Residents

Builder's risk insurance is a crucial safeguard during construction projects in Colorado and Utah, where local weather extremes, theft rates, and regulatory requirements add complexity and risk to every build. Knowing exactly what perils are covered protects both your investment and your peace of mind.

• Severe Weather Threats: Colorado ranks #2 nationwide for hail claims, and both states face increasing wildfire and wind damage risks—from Fort Collins to Salt Lake City.
• Theft and Vandalism: Construction sites are frequent targets, especially where Larimer County’s property crime rates exceed national averages.
• Regulatory Compliance: Claims must be handled within strict state timelines—Colorado requires payment within 60 days—and flood exclusions mean you may need separate protection.

What Most People Get Wrong

Many assume builders risk covers every possible peril during construction, but standard policies exclude floods and earthquakes—a major gap in post-wildfire or heavy rain scenarios. Others underestimate the risk of theft or vandalism until it happens, believing on-site security is enough.

Another common mistake is overlooking the policy’s limits and special deductibles for wind and hail, especially in high-risk corridors where premiums can be 40% higher.

The Complete Picture

Builder's risk insurance generally covers damage from fire, windstorm, hail, theft, vandalism, lightning, explosions, and vehicle collisions. However, exclusions and breakdowns matter: flood is nearly always excluded and requires a separate policy, while some policies require specific security measures for theft claims to be valid. Coverage also typically ends once a project is completed or occupied, so timing is critical.

Because builder's risk is a type of commercial property policy, regional risks—like June hail in Colorado or late-summer wildfire in Utah—can directly influence premiums (average: $800–$3,000 per $1M coverage). Losses from theft, wind, and weather can exceed millions; getting coverage right is vital, especially given most claims are weather- or theft-related. Always review your policy’s exclusions, deductibles, business interruption add-ons, and replacement cost versus actual cash value terms.

Making the Right Decision for Colorado and Utah Residents

Question 1: Does your project’s location face specific regional hazards?

Evaluate risk factors unique to your site:

• Is your build in a hail-prone corridor near Fort Collins or Colorado Springs?
• Does your Utah site border wildfire zones or regions with flooding after fires?

Question 2: Have you reviewed all policy exclusions before starting the build?

Every builder's risk policy is different. Examine these details:

• Are theft and vandalism explicitly covered, and are there special requirements (like fencing or alarms)?
• Does your policy include business interruption or ordinance/law coverage?

Question 3: Are you prepared for project delays, and will your coverage extend?

Construction delays are common—up to 70% are caused by site coordination issues. Plan for possible weather or supply chain setbacks and notify your insurer if timelines change so your coverage doesn’t lapse.