What Is Course of Construction Insurance?

Course of construction insurance—also called builder’s risk—is first-party property insurance for insured construction work, materials and related project property while a building is being built, renovated or repaired. It addresses physical loss or damage during the construction phase. The policy wording determines the insured property, parties, perils, locations and point at which coverage ends. A project accumulates value before it is complete. Materials have been purchased, labour has been incorporated into the work and several parties may have an insurable interest in the same property. A course-of-construction policy is designed to insure that shared project exposure rather than leave every contractor to litigate responsibility after a physical loss. The Supreme Court of Canada has described builder’s risk, contractors’ risk and course-of-construction insurance as forms of all-risk property insurance used for physical damage on construction sites.