Wrap-up Insurance Vs. Builders Risk: Which Is Right For You?

Insurance can be complex. With various types of coverage and policy options available, navigating the intricacies of insurance and making an informed decision can be challenging.

When purchasing insurance for your construction business, you’re likely left with many questions. One question many builders have is which insurance coverage they need to protect their construction project - wrap-up insurance, builder risk, or both? In this article, our goal is to uncover differences between wrap-up insurance vs. builders risk to bring clarity on the coverage you may need for your project.

Jump To:

1. Wrap-up insurance basics
2. Builders risk basics
3. Wrap-up insurance and builders risk similarities
4. Wrap-up insurance and builders risk difference
5. How to decide what you need?
   
   
   

Wrap-Up Insurance Basics

Wrap-up insurance is an insurance product designed to cover general liability on large construction projects where multiple contractors and subcontractors are involved. By design, this type of insurance consolidates various insurance coverages into a single policy, covering both the project owner and the contractors working on the project. 

Wrap-up insurance is typically purchased by the project owner or general contractor to streamline the insurance process, ensure uniform coverage across everyone involved, and eliminate coverage gaps. 

Builders Risk Basics

Builders risk insurance, also called course of construction insurance, is a construction insurance product that protects a construction project and structures during the duration of construction or renovation. It covers risks like fire, theft, vandalism, and weather-related damages and is usually purchased by the property owner, general contractor, or developer.

Builders risk insurance covers the construction project site's structure, materials, and fixtures. This insurance is temporary and terminates upon the completion of the project.

The main similarity between wrap-up insurance and builders risk insurance is that this insurance coverage is purchased for a construction or renovation project, and the buyer is typically a builder, developer, property owner, or general contractor. However, the similarities end there, as they differ in purpose, what they cover, and who they cover.

Beyond being an insurance cover for the construction industry and a similar buyer, wrap-up insurance and builders risk have many differences. The chart below outlines the direct differences between these two types of construction insurance.

Wrap-up Insurance

• Policy covers contractors and subcontractors involved in the project
• Liability coverage
• Protects against losses from bodily injury, third-party property damage, completed operations, and contractual liabilities
• Pay for upfront and covers until completion 
  
  

Builders Risk

• Policy only covers the party purchasing it
• Asset coverage
• Protects against losses from fire, theft, vandalism, and storms
• Will be adjusted once a year to values, timelines, and additional premiums

You’re an expert in construction, and that should be your focus. That’s why when it comes to protecting your business and project, it’s best to reach out to an expert in insurance who can help you determine the coverage you need. Working with a construction insurance expert, like the team of brokers at Buildsure, can make all the difference in making an informed decision about your insurance needs while saving time, reducing risks, and, likely, lowering costs.

When you partner with a Buildsure insurance broker, they will first understand your business to uncover if you need wrap-up insurance,  builders risk insurance, or both. The process starts with discussing your business, goals, needs, history, plans, and risk profile. 

From there, they will access their network of insurance carriers to negotiate multiple quotes and coverage options to customize an insurance policy to meet your needs. They will then meet with you to provide their advice, recommendations, and next steps, providing you peace of mind that your construction business is adequately covered.

While we hope this article has cleared up many questions about wrap-up insurance vs. builders risk coverage, we’re here to answer any additional questions you may have. Whether you’re looking for a new policy, would like a quote on an existing policy, or have questions regarding construction insurance, the experienced team at Buildsure is here to help.

They have years of experience helping construction companies just like yours customize insurance packages to suit your business and projects, ensuring you’re adequately covered against potential liabilities and losses. Connect with them today.