One of the most frequently asked questions about construction insurance is “How much does builders risk insurance cost?”

The good news is that a builders risk policy is often more affordable than some clients realize.

That’s because the risk assumed by the insurance company is often low in the early stages of the construction project. Exposure rises over time as the structure reaches various stages of completion, but construction costs are amortized over the entire policy term.

In general, the cost of builders risk insurance will depend on five key factors:


The geographic location of a course of construction project is the biggest component when determining builders risk insurance cost. Coastal areas are typically more expensive than inland regions, and builders risk policy costs go up in areas prone to certain natural disasters, such as wildfires, hailstorms and tornadoes.

Project Type

Does your client have an installation, remodel or construction project? The cost to insure installation is typically the least costly of the three, largely because these projects are usually shorter and less involved. In contrast, remodeling projects can be the costliest to insure since an existing structure comes with significant risk, especially when the project involves structural changes.

Construction Type

The building materials used in construction also factor into the cost of insurance. Higher-quality construction means a more durable structure – and less exposure to risk. For example, projects constructed with fire-resistive material are likely to be more favorably rated than a wood-frame structure, which can easily result in a total loss in the event of a fire.

Optional Coverages

Of course, the type and value of optional coverage the client chooses will influence the insurance premium. These optional coverages may include flood damage, earthquakes, change orders and more.

Additional Fees and Taxes

The type of carrier also factors into the premium. That’s because non-admitted providers often add charges, such as policy fees and surplus line taxes, to builders risk insurance costs. In contrast, admitted carriers, which are regulated under state law and contribute to their state’s Guaranty Fund, cannot include these fees when determining policy premiums. The Zurich builders risk policy is an admitted “A” rated solution for personal and commercial lines clients.

Related Topics and Resources

View more
Who Buys Builders Risk Insurance?
Find out what personal and commercial lines clients qualify for course of construction coverage.
How to Find the Right Builders Risk Policy

Learn how to select the best policy for your client and their project.

Understanding 10 Optional Coverage Endorsements

Get descriptions of several residential and commercial coverage endorsements.

The Best 101 Guide to Builders Risk Insurance

Get a comprehensive overview of the basics, including coverages, policy types and more.

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