If you are a home builder or a contractor, a builder’s risk insurance policy is an insurance cover which insures a building under construction against various risks like collapse, flooding, theft of building materials and fire. The builders risk policy covers the period beginning with the delivery of construction materials at the site and ends when the owners have accepted possession of the house.

There are different ways in which a builder’s risk policy may be organized. A single Shot risk policy is issued on each house being built by the builder. In such a case there is a minimum premium applicable and if the house is completed before the policy expires, there is no refund made. This type of contractor insurance is valuable for builders who do high value constructions or those who build less than six homes per year.