Builders Risk &Soft Costs Insurance.
Builders Risk covers the physical project. Soft Costs cover the indirect financial losses when a covered event delays completion. The two coverages work as a unit — and they have to be structured before the project starts, scaled to project value, and matched to the financing and contractual structure.
Coverage that exists only for one project.
Most insurance is annual. Builders Risk is project-specific. The policy exists to cover one building from groundbreaking to substantial completion, then it ends. Limits are set to the completed value of the work, perils are tuned to the construction phase exposures, and the named insureds include everyone with an insurable interest — owner, general contractor, subcontractors, lender. When the project is done, the coverage retires.
Soft Costs — The Coverage Owners Sometimes Skip
A covered Builders Risk loss that damages physical work also typically delays project completion. The delay drives indirect financial losses — additional construction loan interest, lost lease-up, additional design fees, additional supervision costs. Soft Costs coverage addresses these indirect losses. Without it, the owner recovers for the physical damage but absorbs the financial impact of the delay. Soft Costs is typically added by endorsement with its own sublimits and waiting period.
Course of Construction Coverage Variations
Builders Risk policies vary in significant ways across carriers and projects. Coverage form selection (broad named perils vs. all-risk), valuation method (replacement cost vs. actual cash value), debris removal sublimits, transit and offsite storage sublimits, and existing structure renovation provisions all affect coverage adequacy. Renovation projects with existing-structure exposure require particular attention to the existing-structure endorsement and ordinance-or-law coverage components.
Program architecture for a construction project.
Builders Risk — Course of Construction
The physical-damage centerpiece. Coverage limit set to the completed value of the work. Form selection (broad form vs. all-risk) materially affects coverage scope.
Soft Costs Endorsement
Indirect financial loss coverage including additional loan interest, lease-up commissions, additional design and supervision fees, real estate taxes during delay, and insurance premiums for the extended construction period.
Loss of Rental Income / Business Income
For income-producing projects, coverage for the rental income or business income that the project would have generated had it completed on schedule.
Existing Structure Coverage
For renovation or addition projects, coverage addressing the existing structure being renovated or to which addition is being made. Particularly important on adaptive reuse projects.
Transit and Off-Site Storage
Materials in transit to the project site and materials in off-site staging or storage. Sublimits and conditions vary materially across carriers.
Ordinance or Law Coverage
For renovation projects, coverage addressing the cost of compliance with current building codes when partial damage triggers code upgrade requirements for the entire building.
Builders Risk & Soft Costs — answered.
What is Builders Risk Insurance? +
Builders Risk Insurance is a project-specific property insurance that covers buildings and structures during the course of construction. The coverage protects the physical work in place, materials stored on site or in transit destined for the project, and certain related categories from physical damage caused by fire, wind, theft, vandalism, and other covered perils. The policy is written for the specific project, with limits set to reflect the completed value of the work.
What are soft costs in builders risk insurance? +
Soft costs in builders risk insurance refer to indirect financial losses that result from a covered physical damage event delaying project completion. Common soft cost categories include additional construction loan interest, additional architectural and engineering fees, additional general conditions and supervision costs, real estate taxes during the delay period, lease-up commissions for delayed leasing, additional advertising and marketing expenses, and insurance premiums during the extended construction period.
What is the difference between builders risk and the general contractor's CGL? +
Builders Risk is a first-party property coverage that responds to physical damage to the project itself — the work in place, materials, and project property. The general contractor's commercial general liability is a third-party liability coverage that responds when the contractor's operations cause bodily injury to or property damage to third parties. The two coverages address different exposures.
Adjacent contractor and project hubs.
Four generations of specialty placement.
Kelly Insurance Group traces its lineage to 1881 — from Pittsburgh's Grant Street to a specialty brokerage placing project-specific coverage for owners, developers, and contractors on construction projects ranging from small commercial work to large institutional and infrastructure builds.
READ THE FULL HISTORY →Specialists in project-specific placement.
Builders Risk and Soft Costs placements require brokers who understand course-of-construction form variation, soft cost endorsement structure, and the project financing context that drives soft cost limit selection. Our team has placed these programs.
MEET THE KIG TEAM →Client Portal · COIs on Demand
Most KIG clients receive access to our custom client portal for 24/7 certificate generation — essential for owners and contractors managing multiple lender, agency, and subcontractor certificate requirements across active project Builders Risk placements.
Discuss your project program.
Tell us about your project — owner or contractor, project type, construction value, timeline, location, and financing structure. We structure Builders Risk and Soft Costs placements around the specific project profile.
- Commercial and institutional new construction
- Multifamily residential development
- Adaptive reuse and renovation projects
- Mixed-use development
- Hospitality and retail construction
- Healthcare facility construction
- Infrastructure and civil construction
- Industrial and manufacturing facility construction
// COVERAGE AVAILABILITY, TERMS, AND ELIGIBILITY VARY BY CARRIER, STATE, AND INDIVIDUAL PROJECT. BUILDERS RISK AND SOFT COSTS POLICY FORMS VARY MATERIALLY ACROSS CARRIERS. THIS PAGE DESCRIBES COVERAGE CONCEPTS GENERALLY. CONTACT KIG TO DISCUSS YOUR SPECIFIC PROJECT. KIG TRACES ITS AGENCY LINEAGE TO 1881.