One Storm, One Theft, One Fire, Connecticut Contractors Beware: What Happens If You Don’t Carry Builder’s Risk Insurance

Tina Orbita
Jan 23
5 min read

In Connecticut, construction doesn’t slow down for unpredictable weather, rising material costs, or jobsite theft. From residential renovations in West Hartford to commercial builds in New Haven and large-scale developments across Hartford County, contractors face risk every single day. One storm. One theft. One fire. That’s all it takes to turn a profitable project into a financial disaster.

Yet many Connecticut contractors, builders, and property owners still underestimate or misunderstand Builder’s Risk Insurance. Some assume their general liability policy will cover damages during construction. Others believe the property owner’s insurance is enough. And some skip coverage entirely to cut costs—until something goes wrong.

This guide is designed to be a comprehensive, plain‑English resource for Connecticut contractors, developers, and business owners who want to understand the real‑world consequences of not carrying Builder’s Risk Insurance. We’ll break down what it is, what it covers, what happens when you don’t have it, and why it’s one of the most overlooked but critical forms of commercial insurance in Connecticut.

Understanding Builder’s Risk Insurance in Connecticut

Builder’s Risk Insurance—sometimes called course of construction insurance—is a specialized type of commercial property insurance designed to protect buildings and structures while they are under construction, renovation, or major remodeling.

In Connecticut, Builder’s Risk Insurance typically covers:

New construction projects
Ground‑up commercial builds
Residential construction
Major renovations or additions
Tenant improvements
Mixed‑use developments

Unlike general liability insurance, Builder’s Risk focuses on property damage, not bodily injury or third‑party claims. It protects the financial investment in materials, labor, and partially completed structures.

Who Needs Builder’s Risk Insurance?

In Connecticut, Builder’s Risk Insurance may be needed by:

General contractors
Subcontractors
Home builders
Commercial builders
Property owners
Real estate developers
Investors financing construction
Municipal and institutional project owners

Often, contracts will specify who is responsible for carrying the Builder’s Risk policy. If it’s not clearly defined, disputes can arise after a loss—exactly when no one wants legal confusion.

Common Risks on Connecticut Construction Sites

Connecticut’s geography, climate, and dense urban areas create unique exposures for construction projects.

Severe Weather and Storm Damage

From nor’easters and heavy snowfall to windstorms and hurricanes, Connecticut's weather can cause:

Roof collapse from snow load
Water damage from rain intrusion
Wind damage to framing and materials
Flooding in coastal or low‑lying areas

Without Builder’s Risk Insurance, storm damage repairs come directly out of pocket.

Theft and Vandalism

Construction site theft is one of the most common and costly claims in Connecticut. Copper wiring, HVAC units, lumber, tools, and appliances are frequent targets.

Builder’s Risk Insurance can cover stolen materials and vandalism, while most general liability policies will not.

Fire and Explosion

Temporary wiring, welding, heating equipment, and flammable materials increase fire risk during construction. Even a small fire can destroy months of work.

A single fire loss without Builder’s Risk coverage can bankrupt a small contractor.

What Happens If You Don’t Carry Builder’s Risk Insurance

What Happens If You Don’t Carry Builder’s Risk Insurance? It’s a question many Connecticut contractors only ask after a loss occurs—and by then, the answer is painful. What Happens If You Don’t Carry Builder’s Risk Insurance is simple: you pay for the damage yourself. That can mean paying out of pocket to repair or rebuild damaged work, replacing stolen materials at current market prices, absorbing project delays and lost income, facing potential lawsuits from property owners or investors, and even losing future contracts due to failing to meet insurance requirements. In Connecticut’s competitive construction market, one uninsured loss can permanently damage a business’s financial stability and reputation.

No Coverage Under General Liability

A common misconception is that commercial general liability insurance covers construction damage. It does not.

General liability policies typically exclude:

Damage to the work itself
Damage to materials being installed
Losses caused by weather, fire, or theft to the project

Without Builder’s Risk Insurance, there is no safety net.

Contractual and Legal Consequences

Many Connecticut construction contracts require Builder’s Risk Insurance. Failure to carry it can result in:

Breach of contract claims
Withheld payments
Termination of the project agreement
Legal disputes over who pays for the loss

Real‑World Scenarios Connecticut Contractors Face

Scenario 1: Windstorm Destroys Framing

A commercial building in Hartford suffers severe wind damage overnight. Framing collapses, and materials are ruined.

With Builder’s Risk Insurance: Repairs are covered.
Without it, the contractor absorbs tens of thousands in losses.

Scenario 2: Theft of Materials

Copper wiring and appliances are stolen from a residential project in New Haven.

Builder’s Risk Insurance can reimburse stolen materials.
Without coverage, replacements come out of pocket.

Scenario 3: Fire During Renovation

A renovation project in Stamford experiences a fire caused by temporary heating equipment.

Builder’s Risk Insurance covers fire damage.
Without it, the project may be financially unrecoverable.

What Builder’s Risk Insurance Typically Covers

While policies vary, Connecticut Builder’s Risk Insurance often includes:

Fire and smoke damage
Wind and hail
Theft and vandalism
Lightning
Explosion
Water damage (non‑flood)
Materials in transit or temporary storage

Optional endorsements may include:

Flood insurance
Earthquake coverage
Soft costs (architect fees, permits, interest)
Delay in completion of coverage

What Is Usually Excluded

Builder’s Risk Insurance does not cover everything. Common exclusions include:

Normal wear and tear
Faulty workmanship (though resulting damage may be covered)
Employee theft
War or nuclear hazards
Flood unless endorsed

Understanding exclusions is critical when purchasing coverage in Connecticut.

Builder’s Risk Insurance vs Other Commercial Insurance

Builder’s Risk vs General Liability

Builder’s Risk: Covers property damage to the project
General Liability: Covers third‑party bodily injury and property damage

Builder’s Risk vs Commercial Property Insurance

Commercial property policies typically do not cover buildings under construction.

Builder’s Risk and Workers’ Compensation

Workers’ compensation covers employee injuries—not property losses.

Each policy plays a role, but none replaces Builder’s Risk Insurance.

How Much Does Builder’s Risk Insurance Cost in Connecticut?

Builder’s Risk Insurance premiums in Connecticut depend on:

Project value
Construction type
Location
Duration of the project
Coverage limits and deductibles

For most projects, the cost is a small percentage of the total construction budget—far less than the cost of one uninsured loss.

Who Should Be Named on the Policy?

In Connecticut, Builder’s Risk policies often list:

Property owner
General contractor
Lender or mortgagee
Additional insureds as required by contract

Properly structuring the policy prevents disputes after a claim.

Why Connecticut Contractors Skip Builder’s Risk—and Why They Shouldn’t

Common reasons include:

Trying to reduce project costs
Assuming another party has coverage
Misunderstanding what general liability covers

The reality? Skipping Builder’s Risk Insurance is one of the most expensive shortcuts a contractor can take.

How Builder’s Risk Insurance Protects Your Business Reputation

Beyond financial protection, Builder’s Risk Insurance:

Keeps projects on schedule after losses
Protects relationships with clients and lenders
Demonstrates professionalism
Helps contractors win larger bids

In Connecticut’s tight‑knit construction industry, reputation matters.

Conclusion: One Storm Is All It Takes

In construction, risk is unavoidable—but uninsured risk is optional. One storm, one theft, or one fire can erase months of hard work and years of business growth.

For Connecticut contractors, developers, and property owners, Builder’s Risk Insurance isn’t just another policy—it’s a critical safeguard for your livelihood. Understanding what happens if you don’t carry Builder’s Risk Insurance could be the difference between surviving a loss and closing your doors.

Frequently Asked Questions (FAQs)

1. Is Builder’s Risk Insurance required in Connecticut?

Builder’s Risk Insurance is not mandated by state law, but it is often required by contracts, lenders, and property owners for construction projects.

2. Does Builder’s Risk Insurance cover theft in Connecticut?

Yes, most Builder’s Risk policies cover theft of materials from the jobsite, in transit, or in temporary storage, subject to policy terms.

3. Can a subcontractor purchase Builder’s Risk Insurance?

Yes. Subcontractors may purchase coverage if required by contract, though it is more commonly carried by the property owner or general contractor.

4. Does Builder’s Risk Insurance cover weather damage?

Most policies cover wind, hail, and certain water damage. Flood coverage usually requires a separate endorsement.

5. How long does Builder’s Risk Insurance last?

Coverage typically lasts for the duration of the construction project and ends when the building is completed or occupied, whichever comes first.