Builders Risk insurance is really a misnomer. It has nothing to do with liability insurance or getting sued.
Instead, it’s simply property insurance on a construction start.
In some parts of the country, its also referred to as course of construction insurance.
Builders Risk covers perils such as fire, wind, theft, and vandalism and many more.
It typically does not cover perils such as earthquake, flood, or wind in beach zones unless the policy has been specifically endorsed to do so.
If you’re going to properly set up your policy, coverage should be effective prior to when the materials are delivered to the jobsite. Coverage ends upon the earlier of closing the sale, occupancy, or the policy expiration date.
After Builders Risk coverage expires due to sale or occupancy, the new owner should take out permanent property insurance on the building such as a Homeowners policy or a Commercial Property policy.