Builders Risk Insurance Dallas TX | Thumann Insurance Agency

What would happen if a hailstorm destroyed your roofing materials the night before installation? Or if thieves stripped the copper wiring from your project over a weekend? Or if a fire swept through your half-finished building and set your timeline back by months?

These are not hypothetical scenarios. In Texas, they happen every construction season. And when they do, the difference between a minor setback and a project-ending disaster comes down to one thing: your builders risk insurance.

At Thumann Insurance Agency, we have been protecting Texas construction projects since 1996. As an independent broker with access to over 80 carriers, we find the right coverage for contractors, property owners, and developers building in Dallas and throughout Texas.

Need coverage beyond builders risk? Many projects also require general liability, commercial auto, workers compensation, and COIs. See our complete Contractors Insurance guide.

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What Is Builders Risk Insurance?

Builders risk insurance, also called course of construction insurance, protects buildings under construction from damage or loss before they are completed. It covers the structure itself, plus the materials, fixtures, and equipment being used in the project.

This coverage is essential because standard property insurance and homeowners policies do not cover buildings that are under construction or major renovation. Without builders risk, you are exposed to the full financial impact of any damage that occurs during the build.

Who Needs Builders Risk Insurance in Texas?

• Contractors and Builders Whether you are a general contractor managing multiple projects or a specialty contractor handling specific trades, builders risk protects your labor and material investments from loss.
• Property Owners If you are building a custom home or commercial building, this coverage protects your investment before the property is complete and covered by standard property insurance.
• Real Estate Developers Large-scale projects like apartment complexes, retail centers, and office buildings require builders risk to protect significant capital investments during construction.
• Subcontractors If you are responsible for specific portions of a project, builders risk can protect your contributions like plumbing, electrical, or HVAC installations.
• Lenders and Financial Institutions Banks and lenders typically require builders risk coverage before they will finance a construction project. It protects their loan investment if something goes wrong during the build.

According to the Associated General Contractors of America, 85% of Texas contractors carry builders risk insurance for projects over $500,000.

Why Is Builders Risk Insurance Essential in Texas?

Texas presents unique risks that make builders risk coverage essential for any construction project.

How Does Texas Weather Threaten Construction Projects?

The National Oceanic and Atmospheric Administration (NOAA) reported 118 tornadoes in Texas in 2023 alone, with many damaging structures, materials, and equipment at active job sites.

• Hailstorms North Texas sits in "Hail Alley," where billion-dollar hail events are common. Large hailstones can dent metal components, destroy roofing materials, crack windows, and damage exterior finishes in minutes.
• Severe Thunderstorms Heavy rainfall causes flash flooding that can compromise foundations, wash away stockpiled materials, and damage equipment. A single 2023 Texas storm caused over $500 million in construction-related damages.
• Temperature Extremes Texas summers regularly exceed 100°F, while winter freezes can drop temperatures below freezing overnight. These swings crack concrete, weaken adhesives, and damage temperature-sensitive materials.
• Wind Damage Even outside of tornado events, high winds can topple scaffolding, blow off partially installed roofing, and scatter unsecured materials across a job site.

What About Theft and Vandalism at Texas Job Sites?

Theft and vandalism at Texas construction sites increased 15% in 2023, according to industry reports. Construction sites are prime targets because they contain:

• Copper wiring and plumbing (highly valuable for scrap)

• Power tools and equipment

• Appliances staged for installation

• Building materials like lumber, steel, and fixtures

Without builders risk coverage that includes theft protection, these losses come directly out of your project budget.

What Does Builders Risk Insurance Cover?

Understanding what your policy covers helps you avoid gaps that could leave you exposed. Here are the primary coverage areas.

What Is Covered Under a Standard Builders Risk Policy?

• The Structure Under Construction This includes the building itself from foundation to roof, including all permanently installed components like framing, plumbing, electrical systems, HVAC, and interior finishes.
• Building Materials and Supplies Coverage protects materials whether they are stored on-site, in transit to the job site, or held at a temporary off-site storage location waiting for installation.
• Fixtures and Installed Equipment Items that become part of the building, such as built-in appliances, cabinetry, and mechanical systems, are covered once they arrive on site.
• Temporary Structures Scaffolding, temporary fencing, construction trailers, and other temporary structures needed during the build can be included in your coverage.

Soft Costs Coverage This optional coverage protects indirect expenses that increase when a covered loss delays your project. Soft costs include:

• Architect and engineering fees for redesign

• Additional permit and inspection costs

• Extended loan interest payments

• Additional rent if you cannot occupy on schedule

• Marketing costs for delayed commercial openings

What Events Trigger Builders Risk Coverage?

Coverage activates when a covered peril causes loss or damage during construction. Common covered events include:

• Fire and lightning

• Wind and hail damage

• Theft and vandalism

• Explosion

• Vehicle collision with the structure

• Falling objects

• Water damage from burst pipes or accidental discharge

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What Does Builders Risk Insurance NOT Cover?

Knowing exclusions is just as important as knowing what is covered. Standard builders risk policies typically exclude:

Common Builders Risk Exclusions

• Worker Injuries Injuries to employees or subcontractors are not covered by builders risk. You need workers compensation insurance to protect your crew.
• Employee Theft Theft by your own employees or subcontractors is typically excluded. Standard theft coverage only applies to third-party theft.
• Faulty Workmanship Damage caused by poor construction practices, defective materials, or design errors is not covered. The policy protects against external perils, not construction mistakes.
• Normal Wear and Deterioration Gradual wear, rust, corrosion, or deterioration of materials is excluded. Coverage applies to sudden, accidental losses.
• Earthquake Damage Standard policies exclude earthquake damage. If your project is in an area with seismic risk, you need a specific earthquake endorsement.
• Flood Damage Flooding from external sources like rising water, storm surge, or overflowing bodies of water is excluded. Texas projects in flood-prone areas need separate flood insurance.
• Penalties and Delays Contractual penalties for missing deadlines or general delays not caused by a covered loss are not covered.

What Endorsements Can Fill Coverage Gaps?

We can add endorsements to address specific risks your project faces:

• Wind and hail coverage with lower deductibles for North Texas projects

• Flood coverage for projects in flood-prone areas

• Earthquake coverage for seismic risk areas

• Debris removal to cover cleanup costs after a loss

• Pollutant cleanup for environmental contamination

• Preservation of property for costs to protect undamaged portions

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How Much Does Builders Risk Insurance Cost in Texas?

This is one of the most common questions we hear from contractors and property owners. The honest answer is that costs vary based on your specific project.

What Is the Typical Cost of Builders Risk Insurance?

Builders risk insurance typically costs 1% to 3% of the total construction budget. Here is what that looks like for different project sizes:

Here are some practical examples of what you might expect to pay for a one-year policy (or project-duration equivalent):

• For a project valued at $250,000: Estimated premium: $2,500 to $7,500
• For a project valued at $500,000: Estimated premium: $5,000 to $15,000
• For a project valued at $1,000,000: Estimated premium: $10,000 to $30,000
• For a project valued at $2,500,000: Estimated premium: $25,000 to $75,000

Your actual premium depends on the factors below.

What Factors Affect Builders Risk Premiums?

• Project Size and Value Larger projects with higher construction values have higher premiums because there is more at risk.

• Construction Type The type of construction affects risk. Frame construction typically costs more to insure than masonry or fire-resistant construction.
• Location and Weather Exposure Projects in North Texas face higher wind and hail exposure, which can increase premiums. Flood-prone areas may require additional coverage.
• Project Duration Longer projects have more exposure time and typically cost more to insure. A 12-month policy costs more than a 6-month policy.
• Security Measures Fenced job sites with security cameras, lighting, and locked storage containers often qualify for lower rates. A 2023 Texas study showed sites with strong security had 20% fewer theft claims.
• Coverage Options Adding endorsements for theft, soft costs, or enhanced wind coverage increases your premium but provides broader protection.
• Claims History Contractors with clean claims histories often qualify for better rates than those with multiple prior claims.

As an independent agent, we compare quotes from 80+ carriers to find the best rates for your specific project.

Does Builders Risk Insurance Cover Theft?

Yes, but with important conditions. This is one of the most common questions we receive, and the answer depends on your policy and your site security.

What Theft Coverage Is Included?

Standard builders risk policies cover theft of:

• Building materials on site

• Fixtures and equipment staged for installation

• Materials in transit to the job site

• Materials stored off-site at approved locations

What Security Measures Are Required for Theft Coverage?

Most carriers require certain security measures before they will pay theft claims. Common requirements include:

• Perimeter fencing around the job site

• Locked gates and storage containers

• Adequate lighting for overnight security

• Security cameras or alarm systems for high-value projects

• Inventory documentation and receipts for materials

If you do not maintain required security measures, your theft claim could be denied or reduced. We help you understand exactly what your policy requires so you can comply and protect your coverage.

Is Employee Theft Covered?

No. Standard builders risk policies exclude theft by your own employees or subcontractors. If this is a concern for your operation, you may need a separate crime or fidelity bond to protect against internal theft.

How Long Does Builders Risk Coverage Last?

Builders risk policies are designed to cover the construction period, not provide permanent protection. Understanding the timing helps you avoid coverage gaps.

What Are Standard Policy Terms?

Builders risk policies are typically written for:

• 3-month terms for small renovations or quick projects

• 6-month terms for residential construction

• 12-month terms for larger commercial projects

When Does Coverage Begin and End?

Coverage begins when materials arrive on site or construction work commences, whichever comes first.

Coverage ends when any of the following occurs:

• The building is completed and ready for occupancy

• You obtain a Certificate of Occupancy

• The building is occupied or put to its intended use

• The policy term expires

• The building is sold to a new owner

What If My Project Is Delayed?

Texas weather, material shortages, and labor issues frequently cause construction delays. If your project runs longer than expected, you can extend your builders risk policy.

We recommend contacting us at least 30 days before your policy expires to arrange an extension. Letting your coverage lapse, even for a few days, leaves your project completely unprotected.

Who Should Purchase Builders Risk Insurance?

The responsibility for purchasing builders risk coverage depends on your contract and your role in the project.

Should the Contractor or Owner Purchase Coverage?

• Contractor-Purchased Policies Many general contractors purchase builders risk as part of their standard project costs. This approach ensures the contractor controls the coverage and can add subcontractors as needed.
• Owner-Purchased Policies Property owners building custom homes or commercial buildings often purchase their own builders risk coverage to protect their investment directly. This ensures coverage matches the owner's interests.
• Contract Requirements Your construction contract should specify who is responsible for obtaining builders risk coverage. Review this carefully before starting any project to avoid gaps or duplicate coverage.

What About Subcontractors?

Subcontractors are typically covered under the primary builders risk policy as additional insureds. However, subcontractors should verify their work is included and understand any deductibles that might apply to claims involving their portion of the project.

What Other Insurance Do Texas Contractors Need?

Builders risk is essential, but it is only one piece of a complete construction insurance program. Here are other coverages Texas contractors typically need.

Essential Insurance for Construction Businesses

• General Liability Insurance Protects against third-party bodily injury and property damage claims. If a visitor trips at your job site or your work damages a neighboring property, general liability responds.
• Workers Compensation Insurance Covers medical bills, rehabilitation, and lost wages for employees injured on the job. Texas does not require workers comp for all employers, but most clients and general contractors require it.
• Commercial Auto Insurance Covers your trucks, trailers, and work vehicles. This is essential if you transport materials, equipment, or crews to job sites.
• Commercial Property Insurance Protects your office, warehouse, and permanently owned equipment and tools. This covers assets you own, not project-specific materials.
• Professional Liability Insurance Also called errors and omissions (E&O), this protects against claims of negligent design, faulty specifications, or professional mistakes.
• Surety Bonds Many public projects and large commercial contracts require bid bonds, performance bonds, and payment bonds to guarantee your work.
• Inland Marine and Equipment Floaters Protects tools and equipment that move between job sites. Unlike builders risk, which covers project-specific materials, equipment floaters cover your owned tools regardless of location.

Can I Bundle Builders Risk with Other Coverages?

Yes. Many contractors save money by rolling builders risk into a comprehensive contractors insurance package. Bundling aligns your coverage lines with your projects, vehicles, and tools under one coordinated plan.

Why Do Texas Contractors Trust The Thumann Agency?

⭐⭐⭐⭐⭐ 4.9 out of 5 based on 250+ reviews

Here is what Dallas contractors and builders are saying about working with us:

Quick response times and exceptional service. They got us a builders risk quote within hours when other agencies said it would take days.

"They found us better coverage at a lower price than we were paying. Same-day COI delivery whenever we need it."

"The team makes construction insurance easy to understand. They took the time to explain every coverage option and helped us identify gaps we did not know we had."

"We have used Thumann for multiple commercial projects. They understand construction and know how to structure coverage that actually protects us."

Read our Google reviews | Call 972-991-9100

FAQs About Builders Risk Insurance in Texas

How Do I Get a Builders Risk Insurance Quote?

Contact Thumann Insurance Agency with your project details, including the construction value, project type, location, and timeline. We compare quotes from 80+ carriers to find the best coverage for your specific project. Most quotes can be delivered within 24 hours.

Does Builders Risk Insurance Cover Renovations?

Yes. Builders risk covers both new construction and major renovations. If you are remodeling a property, the coverage protects new materials, fixtures, and improvements you are adding to the existing structure. The existing building may need separate property insurance.

What Documentation Do I Need for a Builders Risk Claim?

To file a builders risk claim, you will need:

• A detailed description of what happened and when

• Photos and videos documenting the damage

• Receipts and invoices proving ownership and value of damaged items

• Contractor estimates for repair or replacement costs

• Police reports for theft or vandalism claims

We assist you through the entire claims process to ensure fair and timely settlement.

How Does Builders Risk Differ from General Liability?

Builders risk and general liability cover different things. Builders risk covers physical damage to the project itself, including the structure, materials, and equipment. General liability insurance covers third-party bodily injury and property damage claims, like a visitor getting hurt at your job site. Most construction projects need both coverages.

How Quickly Can I Get Coverage?

In most cases, we can bind builders risk coverage within 24 to 48 hours once we have your project details. For standard projects, same-day coverage is often possible. Contact us at 972-991-9100 to get started.

For more information on construction insurance concepts, you can refer to the builders risk insurance guide on Wikipedia or review guidelines from the Texas Department of Insurance.

Protect Your Texas Construction Project Today

Your construction project represents months of planning, significant capital investment, and your professional reputation. Do not let a single storm, theft, or fire put everything at risk.

At Thumann Insurance Agency, we specialize in protecting Texas contractors, property owners, and developers with tailored builders risk coverage. From weather damage to theft and vandalism, we ensure your investment is protected while your project is under construction.

Whether you are building a custom home, managing a commercial development, or renovating an existing property, we are here to help you find the right coverage at the right price.

Last Updated: February 04, 2026

Author: Steve Thumann, Licensed Texas Insurance Broker

Sources: Texas Department of Insurance, National Association of Insurance Commissioners

Disclaimer: This information is provided for general educational purposes only and is not intended to be construed as legal advice or as a complete description of available insurance products or coverages. Coverage terms, conditions, limitations, and exclusions vary by state and insurance provider. Not all products, coverages, or discounts mentioned are available in all states, including Texas. The examples and descriptions provided are for illustrative purposes only. For specific information about your insurance needs or questions about coverage, please contact The Thumann Agency directly.

Reviews and ratings mentioned are collected from verified customers and represent their personal opinions and experiences. Individual results may vary. The Thumann Agency is licensed and operates in accordance with Texas Department of Insurance regulations.