Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Course of construction liability coverage is insurance cover that goes beyond the typical cover offered on a home owner’s policy. This kind of coverage is also referred to as a builder’s risk policy. Enter your ZIP code in our comparison tool to compare insurance quotes for FREE.

Course of Construction Insurance Costs

Regardless of whether a project is a small home renovation or a major industrial renovation, the price of this type of coverage is high mainly due to the greater risk associated with a construction project. The extra cover protects one against added liabilities arising out of bodily injuries or property damage that may be the result of the project. It is a good idea to shop around and to find an insurance provider that offers competitive rates.

A course of renovation is when one undertakes a home upgrading project that exceeds ten percent of the cost of replacing the dwelling. This type of project creates a high risk for an insurance company and can mean some hefty surcharges to existing policies.

Many clients tend not to disclose their renovation projects to their insurance companies just to save the large surcharge. However, not informing the insurance provider can result in a large gap in the homeowner’s policy.

A course of renovation policy is expensive because it leaves the insurance provider exposed to the highest possible risks. Homes under construction can spontaneously combust if things like oily rags and other similar materials are left in a warm environment. Businesses undergoing construction should opt for this too.

Other types of losses for the insuring company can result from vandalism or arson that can be committed while the property is vacant and unguarded. In these situations a, vacancy surcharge can be added to the construction surcharge. These charges are removed once the project has been completed.

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Understanding Coverage

Some carriers insure projects based on the expected replacement cost of the property once the project is completed, whereas others stair-step the coverage using the current replacement costs of the project. It is essential to find out which method an insurance provider is using. Read this to better understand what course of construction insurance covers.

Usually, insurance providers will inspect projects every three to six months. If a project proceeds more quickly than expected and the information is not passed on to the agent, the existing cover may be insufficient in case there is a large loss. It is important to remember that some insurance carriers will require extra security measures to be implemented on the premises.

The amount of safety measures are determined based the anticipated replacement cost upon the project’s completion. The most common safety feature required is the presence of fire extinguishers every 1,000 square feet. In addition, if the property is not occupied, then fire and burglar alarms that are centrally monitored will be required while the project is going on.

Some other safety measures may include the presence of motion censored lighting, temperature alarms and perimeter fencing.

Other Areas to Consider

There are other places where a homeowner is compromised when a construction project is being carried out. One has to exercise caution here also.

cheap course of construction insurance

  • It is a good idea to get a waiver of subrogation. It waives the right of the insurance carrier to recover damages if the loss is the result of contractors’ malpractice or negligence.
  • It is a common practice for people carrying out small projects to have unlicensed contractors do it. However, a licensed contractor will be cheaper in the long run as it will minimize one’s exposure to fraud.
  • Make certain that the contractor carrying out the project has general liability insurance and workers compensation insurance. This will ensure that if a worker is injured on the job, one is not held responsible for the worker’s medical treatment.

Minimizing Costs

Insuring a construction project is a rather daunting task. The key to keeping costs down is understanding the difference between the budget allotted for the project and the actual replacement value. Also, maintaining a line of communication with the agent and appraiser helps to eliminate potential exposure areas.

There are a number of factors that influence the cost of the premiums. Some of the more important one that should be kept in mind when looking for course of construction insurance include:

  • Safety of the construction site
  • Footage of the space being renovated or constructed
  • Standing structures on the site
  • Proximity to areas of tidal waters
  • If the project is a remodeling or a new construction

affordable course of construction insuranceCompanies providing course of construction insurance usually set their own coverage rates and options and there is not much state regulation. This is why rates can vary greatly, so one must really shop around and compare insurance rates to get the best possible prices.

It must be remembered that this is a temporary cover, so it is important to keep an eye on the deadline. The good thing about this insurance is that it applies to all property located at the construction site and to the equipment stored offsite. It also covers material during transport.

It is possible to get cover for things not included in the policy, depending on the type of renovation and the size of the project. For example, larger industrial renovations may want cover for job site vehicles, trailers or offices.

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Things to Remember When Considering Course of Construction Insurance

While the project may be temporary, many things can go wrong, so it is important to choose the insurer with care and make sure one is totally protected. Also, one should make sure to ask the broker exactly what’s covered so there should be no surprises later. We can help you lower your insurance costs. Enter your ZIP code in our comparison tool now for FREE quotes.