Washington Builders Risk Insurance

Builders risk—sometimes called “course of construction” coverage—is a specialized form of property insurance that applies only while a structure is being built or substantially renovated. The policy reimburses the insured for direct physical loss or damage to the project, including materials, equipment, and in many cases temporary structures such as scaffolding and fencing. Coverage typically ends at substantial completion or occupancy, at which point a standard property policy or homeowners policy should take over. Although Washington does not mandate builders risk by statute, most private lenders and municipal bonding authorities now require proof of coverage before releasing funds.

Builders risk insurance is particularly important due to the myriad risks associated with construction projects. From theft of materials and equipment to damage caused by weather events like storms or fires, the potential for financial loss is significant. For instance, if a sudden hailstorm damages roofing materials that have been delivered to the site, the builders risk policy would cover the cost of replacing those materials, ensuring that the project can continue without substantial delays or financial strain. Furthermore, this type of insurance can also protect against liability claims that may arise during the construction process, offering additional peace of mind to contractors and property owners alike.

Moreover, the specifics of builders risk insurance can vary widely based on the insurer and the terms of the policy. Some policies may include coverage for soft costs, which encompass expenses such as architectural fees, permits, and even lost income due to project delays. This can be particularly beneficial for larger projects where time is of the essence and any delay can lead to significant financial repercussions. As construction practices evolve and new risks emerge, it is crucial for builders and developers to stay informed about their coverage options and ensure that they are adequately protected throughout the construction process.

Washington hosts a strikingly diverse array of construction environments. Puget Sound’s high-tech urban core demands rapid-cycle tenant buildouts and complex mixed-use towers. Eastern valleys support large-scale agricultural processing plants. Meanwhile, ski-town resort projects in the Cascades must withstand heavy snow loads and frequent freeze-thaw cycles. According to the Associated General Contractors of America, Washington’s construction employment grew 5.6% year-over-year in 2023, outpacing the national average by nearly two percentage points. That momentum, combined with a median project value now hovering around $18 million, makes robust builders risk strategy more critical than ever.



The unique geographical features of Washington State also play a significant role in shaping construction practices. The coastal regions, with their proximity to the Pacific Ocean, necessitate the use of materials that can withstand saltwater corrosion and moisture. This has led to an increased focus on sustainable building practices, including the use of eco-friendly materials and energy-efficient designs. In addition, the state’s commitment to reducing carbon emissions has spurred innovation in construction techniques, such as the integration of renewable energy sources like solar panels in new developments. As a result, builders are not only focused on meeting immediate construction demands but are also tasked with adhering to stringent environmental regulations that promote sustainability.

Furthermore, the labor market in Washington is experiencing a shift, with a growing emphasis on skilled trades and vocational training programs. This trend is essential as the state grapples with a shortage of qualified workers to meet the burgeoning demand in the construction sector. Initiatives aimed at attracting younger generations to the trades are gaining traction, with local community colleges and trade schools enhancing their curricula to include modern construction technologies and practices. As the industry evolves, the integration of technology, such as Building Information Modeling (BIM) and drone surveying, is becoming commonplace, allowing for more efficient project management and execution. This technological advancement not only streamlines operations but also enhances safety protocols on job sites, ensuring that workers are better protected in an increasingly complex construction landscape.

No two builders risk forms are identical; however, most “all-risk” contracts in Washington share a common spine of covered causes of loss. Understanding how each peril interacts with local weather patterns, supply chains, and jobsite practices helps insured parties avoid dangerous gaps.

Fire and Explosion

Despite mandatory sprinkler ordinances in Seattle, fire remains the costliest single peril in Washington construction. The Department of Ecology recorded more than $120 million in insured losses from construction-site fires between 2019 and 2022. Hot-work permits, spark shields, and after-hours fire watches typically qualify projects for reduced premiums, but a dedicated builders risk policy is still the only line of defense against catastrophic structural loss. Additionally, the use of fire-resistant materials and the implementation of comprehensive fire safety training for workers can significantly mitigate risks. Regular fire drills and clear evacuation plans are essential, as they not only protect the site but also enhance the safety of personnel, thereby reducing potential liabilities.

Windstorm and Hail

Western Washington’s famed “Pineapple Express” weather systems routinely deliver 60-mph gusts and horizontal rain that can rip temporary roofing right off a mid-rise deck. While hail is less frequent west of the Cascades, Yakima and Spokane both experienced record hail events in 2020 that shattered skylights and damaged millions in exposed HVAC units. Builders risk carriers often require wind-rated tarps, tie-downs, and a documented high-wind response plan as conditions of coverage. In addition to these measures, it is advisable for contractors to conduct regular inspections of temporary structures and materials to ensure they can withstand extreme weather. Implementing a proactive maintenance schedule can help identify vulnerabilities before they lead to significant damage, ultimately safeguarding both the project timeline and budget.

Theft and Vandalism

Theft is the single most common claim frequency statewide, driven by high scrap‐metal prices and the secondary market for copper wiring, catalytic converters, and lithium batteries. Nighttime security cameras, fencing with locked gates, and strict tool-check procedures can earn premium credits of 5 % to 15 % with many underwriters. Failure to implement such controls may trigger sub-limits or coinsurance penalties. Furthermore, engaging local law enforcement for regular patrols can enhance security, while community watch programs can deter potential thieves. The integration of technology, such as GPS tracking for tools and equipment, also provides an additional layer of protection, ensuring that any stolen items can be quickly located and recovered.

Water Damage

Washington’s annual rainfall ranges from 8 inches in the Columbia Basin to more than 90 inches along the Olympic Peninsula, and sudden downpours can overwhelm temporary roof drains. Mold growth can start in as little as 48 hours, leading to costly remediation and schedule slippage. Many policies exclude mold unless explicitly endorsed, so verifying water intrusion language and adding a “Resultant Mold” extension is prudent for any multi-story or wood-frame job. Additionally, employing advanced drainage solutions and water diversion systems can help mitigate the risk of water damage. Regular inspections of waterproofing measures and prompt response to leaks or pooling water can further protect the integrity of the structure, ensuring that projects remain on track and within budget.

Earthquake and Landslide

Sitting atop the Cascadia Subduction Zone, Washington is one of America’s most seismically active states. The 6.8-magnitude Nisqually quake in 2001 still informs building code amendments and insurance appetites today. Standard builders risk forms usually exclude earth movement, but carriers with local expertise offer earthquake and landslide buybacks that dovetail with geotechnical studies. Premiums can be sizable—often 0.25 % to 0.40 % of the insured value—but pale in comparison to the cost of reconstructing a partially completed structure after a moderate seismic event. Moreover, incorporating seismic design principles into construction plans, such as base isolators and reinforced structures, can significantly reduce the risk of damage. Engaging with structural engineers who specialize in seismic retrofitting can provide valuable insights, ensuring that new builds are not only compliant but also resilient against potential geological hazards.

Any party with a financial interest in a Washington jobsite stands to lose if disaster strikes mid-construction. Project owners are the most common named insureds because they will ultimately hold the finished asset. General contractors frequently add themselves and key subcontractors as additional insureds to protect against material losses that could halt operations. Lenders and public bond issuers typically appear as mortgagees or loss payees, ensuring loan collateral remains secure. Even architects may be added when their fee structure includes at-risk reimbursable expenses tied to construction milestones.

Policies are normally written on a project-specific basis, with terms ranging from three months for small tenant improvements to 36 months for complex infrastructure builds. Wrap-up or “Master Builders Risk” programs can bundle multiple projects under a single annual aggregate where an owner or contractor maintains a constant pipeline of work. Coverage begins either on the policy’s effective date or when materials first arrive onsite—whichever is later—and ceases upon certificate of occupancy, sale, or insured’s interest termination. Extensions are common but must be requested before the expiration date; otherwise a gap in coverage is created that may trigger new deductible structures or underwriting surcharges.

Washington insurers typically use completed value forms, meaning the limit should equal the full replacement cost of the finished structure, including labor and reasonable profit. Under-insuring can invoke the coinsurance clause, leading to pro-rated claim payments that cripple project cash flow. Beyond “hard” costs, many policies allow for soft-cost endorsements that cover architectural fees, legal permits, interest on construction loans, and marketing expenses incurred because of an insured delay. Given Puget Sound’s expensive permit queues—Seattle’s Master Use Permit averaged $46,000 in 2023—soft-cost protection is often as important as the limit covering bricks and mortar.

While Washington has no blanket builders risk statute, several regulations indirectly shape coverage. Revised Code of Washington (RCW) 48.30 governs unfair claims practices, establishing clear timelines for carrier response—crucial during the compressed schedules typical of West Coast developments. Additionally, the Washington State Energy Code and local seismic ordinances can trigger expensive code-upgrade requirements after a loss. Policies crafted for Washington projects frequently include “Ordinance or Law” endorsements to fund these mandatory upgrades, but limits vary dramatically from carrier to carrier.

Builders risk premiums in Washington usually range from 0.75 % to 2.5 % of the total insured value, depending on location, construction type, and deductible selection. Wood-frame townhomes in Tacoma may see rates at the upper end due to fire and theft exposure, while concrete tilt-up warehouses near Tri-Cities can secure sub-1 % premiums. Deductibles commonly start at $5,000 for theft and $10,000 for wind or water, though many institutional owners now choose percentage deductibles—1 % to 2 % of the insured value—to reduce upfront cost on eight-figure projects.

Market capacity also influences price. The withdrawal of several global carriers from Pacific Northwest catastrophe risks in 2022 tightened supply, pushing average rates up approximately 12 % statewide, according to the Insurance Services Office. Engaging brokers early, providing detailed geotechnical reports, and demonstrating proactive risk management can still attract favorable terms even in a hardening market.

Speed and documentation drive successful claims outcomes. State regulations give carriers ten working days to acknowledge receipt, but complete photo logs, delivery receipts, and incident reports can accelerate settlement dramatically. Most large carriers station dedicated adjusters in Seattle or Spokane, shortening inspection times. After reserve establishment, funds are released on a reimbursement basis; therefore, maintaining robust liquidity or an established line of credit is vital, especially when emergency remediation must begin before insurers finalize scope.

Washington underwriters consistently reward tangible risk-control measures. Daily hot-work permits reduce fire premiums; third-party security patrols deter theft; moisture-monitoring programs and temporary roof seals mitigate water damage. Projects valued above $50 million often commission seismic and wind-tunnel studies, which can shave 0.1 percentage points off rates—translating to six-figure savings. Implementing a formal incident-response plan and sharing it with the carrier before binding can also yield deductible reductions.

Does builders risk cover faulty workmanship?

Most policies exclude the cost to repair defective work itself but do cover resulting damage to other insured property. A “LEG 3” or “Resultant Damage” endorsement can broaden protection if carriers agree.

Can multiple parties be named insureds?

Yes. Owners commonly list the general contractor, key subcontractors, and lenders as named or additional insureds to ensure aligned interests and smoother claims handling.

What happens if the project is delayed beyond the policy term?

An extension can usually be added for an additional premium, provided the request is made before the original expiration date. Absent an extension, coverage ceases automatically.

Are pandemics or communicable diseases covered?

Virtually all builders risk forms written since 2020 contain explicit exclusions for virus-related delays or shutdowns. Separate parametric or business-interruption solutions may be required.

How early should a policy be bound?

Brokers recommend binding at least 30 days before groundbreaking to allow compliance reviews by lenders and local authorities. Early binding also locks in rates, insulating the budget against market swings.

Washington’s fast-growing and geographically varied construction sector offers both opportunity and risk. From seismic events along the Cascadia Fault to relentless Puget Sound rain, the state presents challenges that standard builders risk templates cannot always address. Thoroughly evaluating perils, selecting appropriate endorsements, and partnering with carriers that understand the local regulatory environment together create a safety net powerful enough to keep projects on track even when the unexpected strikes. Armed with the insights above, owners, contractors, and lenders can proceed with confidence, knowing their capital is shielded from the hazards inherent to building in the Evergreen State.