Builders Risk Insurance Knoxville TN — Course of Construction Coverage for Contractors & Developers
Builders risk insurance protects buildings while they are under construction or major renovation. Whether you are building a custom home in Farragut, developing a commercial property in Downtown Knoxville, or renovating an investment property in Oak Ridge, a builders risk policy protects your project from fire, theft, windstorms, vandalism, and other costly losses before a permanent property policy takes over.

Knoxville Insurance Store provides builders risk insurance throughout Knoxville, Farragut, Hardin Valley, Oak Ridge, Maryville, Powell, Lenoir City, and the surrounding East Tennessee construction market. As an independent insurance agency we work with multiple carriers to find the right builders risk coverage for your specific project — residential, commercial, or renovation.

What Is Builders Risk Insurance?
Builders risk insurance — also called course of construction insurance — is a specialized type of property insurance designed specifically for buildings under construction or major renovation. Unlike standard commercial property insurance, a builders risk policy is written for a defined project term and covers the unique risks that exist during the construction phase.

The policy typically begins before materials arrive at the job site or site work starts, and ends upon project completion, issuance of a certificate of occupancy, or when a permanent property policy takes effect. Most builders risk insurance policies are available for terms of three months, six months, or twelve months, with the option to extend if the project is not completed within the initial policy term.

Builders risk insurance is highly recommended for any construction project — and most lenders require it before releasing funds or allowing construction to begin. Contracts often stipulate that either the property owner or the general contractor must purchase the builders risk policy before work starts.

What Does Builders Risk Insurance Cover?
A standard builders risk policy covers physical loss or damage to a building under construction from a broad range of perils. In Knoxville and across East Tennessee, builders risk insurance addresses the specific vulnerabilities of the local construction environment including severe weather such as thunderstorms, windstorms, hail, and tornadoes.

Typical builders risk coverage includes:

Fire and explosion
Wind, hail, and storm damage
Theft and vandalism of materials on the job site
Water damage during construction
Lightning
Structural collapse during construction
Materials in transit to the construction site
Materials temporarily stored off-site
Temporary structures such as scaffolding and fencing used during construction
Soft costs — architectural fees, permits, and additional financing costs from covered delays
Debris removal following a covered loss
Labor costs and profits related to a covered loss
Builders risk coverage fills the gap between a contractor's general liability policy and a permanent property policy — providing financial security against significant risks like theft of materials or damage to a partially finished structure.

What Does Builders Risk Insurance Not Cover?
Understanding builders risk exclusions is just as important as knowing what is covered. Standard builders risk policies do not cover:

Worker injuries — separate workers compensation insurance is required for that
Tools and contractor equipment — an inland marine coverage or equipment floater is needed
Defective workmanship
Employee theft
Floods and earthquakes — unless specific endorsements are added
Foundations — typically excluded from standard builders risk form
Workplace accidents and bodily injury liability
Given Tennessee's weather conditions and certain types of construction exposure, specific endorsements may be necessary to address natural disasters and other risks not covered under the standard form. Knoxville Insurance Store will review your project scope and make sure your policy provisions address the exposures specific to your build.

Builders Risk Insurance for Knoxville Contractors and Developers
Contractors, general contractors, developers, and property owners across Knoxville rely on builders risk insurance to protect construction investments. Whether you are building residential homes in Hardin Valley, developing commercial property in Downtown Knoxville, or renovating retail space in Oak Ridge, builders risk coverage protects materials, structures, and financial exposure throughout the project.

Builders risk policies are typically available for:

Residential new construction — custom homes, spec homes, and multi-family projects
Commercial construction projects — office buildings, retail, and mixed-use development
Renovation and remodeling — significant renovations to existing structures
Installation projects — major mechanical, electrical, and systems installation
Projects greater than 30 percent complete may still be eligible for builders risk insurance but are subject to additional underwriting review. If construction has already started, you may need to provide the percentage of construction completed and the total completed value when applying.

How Much Does Builders Risk Insurance Cost in Tennessee?
The cost of a builders risk policy depends on the project's total completed value, construction type, project timeline, location, and coverage options selected. Premiums for builders risk insurance generally range from 1 percent to 5 percent of the total project value. The construction budget is the best source for determining the appropriate coverage limit — and the limit must accurately reflect the total completed value of the structure including all materials and labor costs.

Policy limits are often set as a percentage of the total construction budget. Underinsuring a project to reduce premium is one of the most costly mistakes owners and contractors make — the builders risk policy will only pay for damages up to the coverage limit in the policy.

Builders Risk Insurance FAQ
Who purchases builders risk insurance? The responsibility to obtain builders risk insurance typically falls to key project stakeholders — property owners, general contractors, or developers. Contracts often specify who is required to carry the policy. Most lenders financing construction projects require proof of builders risk coverage before releasing funds.

When should builders risk insurance start? Coverage should be secured before construction starts — ideally before materials are delivered to the construction site. Most buyers purchase builders risk insurance prior to or on the date of construction when they finalize the contract. Securing coverage from the start protects your investment against unexpected events from day one.

Does builders risk insurance cover theft of materials? Yes. Most builders risk policies include coverage for theft of materials on the job site, in transit, and temporarily stored off-site, though policy terms and conditions vary. Vandalism is also typically covered.

Does builders risk cover soft costs? Optional endorsements can cover soft costs — additional expenses arising from project delays due to covered losses, including architectural fees, permit costs, and financing carrying costs. These endorsements are worth considering on larger commercial construction projects.

Can a builders risk policy be extended? Yes — you can often extend a builders risk insurance policy if the project is not completed by the end of the initial policy term, but typically only one time. Contact our office before your policy expires to discuss extension options.

Does builders risk insurance cover water damage? Yes. Water damage during construction is typically covered under a standard builders risk policy. However, flood damage from rising water requires a separate flood endorsement or policy.

Get a Builders Risk Insurance Quote in Knoxville
Before breaking ground on your project, make sure the right builders risk policy is in place. Knoxville Insurance Store helps contractors, developers, and property owners secure tailored protection for construction investments across Knoxville and East Tennessee. We shop multiple carriers to find builders risk coverage that matches your project scope, timeline, and budget.

Call our office at (865) 579-0500 Monday through Friday, 9AM to 5PM

Or visit knoxvilleinsurancestore.com to request a builders risk quote today.

Knoxville Insurance Store is a DBA of IRM Insurance Agency LLC. Located at 11002 Kingston Pike Suite 103, Knoxville TN 37934. Licensed to write builders risk insurance across Tennessee.