How Much Does Builders Risk Insurance Cost?

Nate Jones, CPCU, ARM, CLCS, AU
1 day ago
3 min read

Whether you’re building a new home, renovating your property, or managing a commercial construction project, builders risk insurance plays a crucial role in protecting your investment from unexpected losses. One of the most common questions property owners, developers, and contractors ask is: How much does builders risk insurance cost?

The answer isn’t one-size-fits-all. Costs vary based on project type, size, location, materials, and coverage selected. This guide breaks down key pricing factors and offers clear expectations for both residential and commercial builders risk insurance.

What Builders Risk Insurance Covers

Before we dive into costs, it’s important to understand what this type of policy protects. Builders risk insurance typically covers:

Property under construction or renovation
Materials and equipment on site or in transit
Damage caused by fire, wind, theft, or vandalism
Optional endorsements like flood, earthquake, or soft costs

For a primer on builders risk coverage, see the Insurance Information Institute.

Average Cost Range for Residential Builders Risk Insurance

Builders risk insurance for residential projects — such as new home construction or major renovations — is typically priced as a percentage of the total construction value.

Estimated 2026 Cost Ranges (Residential):

New Home Builds: ~1%–4% of total construction value
Major Renovations: ~1%–3% of total renovation value

For example, on a $300,000 home build, builders risk insurance may cost roughly $3,000 to $12,000 annually — depending on coverage options and project specifics.

Average Cost Range for Commercial Builders Risk Insurance

Commercial projects — such as apartment buildings, office complexes, or retail spaces — involve higher values and more complex risks. As a result, builders risk insurance premiums tend to be higher than for residential projects.

Estimated 2026 Cost Ranges (Commercial):

Small Commercial Projects: ~1.5%–4% of construction value
Large Commercial Projects: ~2%–5% (or more) of construction value

For a $1,000,000 commercial project, builders risk insurance might range from roughly $15,000 to $50,000+ per year.

Key Factors That Affect Builders Risk Insurance Costs

1. Project Value

The insured value (often the total cost to rebuild the project) is the primary driver of premiums.

2. Project Type & Duration

Longer projects or those with complex scopes face higher costs due to prolonged exposure.

3. Location and Risk Profile

Cities with higher weather risk (hurricanes, hail, flooding) or higher crime rates typically face higher premiums.

Flood coverage usually requires a separate policy through the National Flood Insurance Program, as it’s not included by default in standard builders risk insurance.

4. Materials and Storage

Coverage may extend to materials stored offsite or in transit — these exposures can influence pricing.

5. Optional Endorsements

Adding flood, earthquake, soft costs, or extended coverage limits will increase the premium.

Cost Comparison: Residential vs. Commercial Builders Risk

Project Type	Typical Premium as % of Value	Example Premium (Approx)
Residential New Build	1%–4%	$3,000–$12,000 (on $300K build)
Residential Renovation	1%–3%	$2,000–$6,000 (on $200K rehab)
Small Commercial	1.5%–4%	$15,000–$40,000 (on $1M project)
Large Commercial	2%–5%	$40,000–$100,000+ (on $2M project)