Builder's Risk Plus
Coverage for the builder that follows a construction project from groundbreaking to close.
This is an estimate, not a bound policy — a licensed VAB producer confirms final terms before coverage starts. Sgt. Savings can answer questions but can't quote, bind, or guarantee coverage.
Builder's Risk Plus is a combined construction-phase policy for the builder on a project, protecting the property under construction, the builder's general liability exposure, and the financial risk that the project runs over budget or isn't completed. It's built specifically for one-time-close construction-to-permanent lending, where the homeowner and lender both have a direct stake in the project finishing on time and on budget — and it names them as claimants and loss payees alongside the builder.
Who This Is Really For
The ideal buyer.
The ideal buyer is a builder or general contractor running one-time-close construction-to-permanent projects, where the lender is disbursing draw funds against the builder's progress and has its own direct stake in the project finishing on time and on budget. The trigger is usually the lender itself — a construction lender that won't release the first draw without proof of a performance-backed builder's risk policy naming the homeowner and lender as claimants and loss payees, not just a standard property policy in the builder's name alone. This buyer has often carried a generic builder's risk or course-of-construction policy on past projects and finds it doesn't address the liability, performance, or draw-funds exposure this specific lending structure creates. What fits them here is a single combined policy built for exactly that structure — property, general liability, performance, and draw-funds protection together, with the homeowner and lender's interests already built in.
- Builders working construction-to-permanent, one-time-close projects
- General contractors managing draw-fund disbursements from a construction lender
- Builders who need liability coverage for the construction period, not just property coverage
- Contractors whose lender requires a performance-backed builder's risk policy as a condition of the loan
- Builders managing the risk of cost overruns or non-conforming work on a fixed-scope project
What It Covers
Coverage, broken down.
Course of Construction Property
Inland marine property coverage for the project under construction, valued at completed value against the total project cost.
Commercial General Liability
General liability coverage for the builder during the construction period.
Contractor's Performance Liability
Covers exposure from the builder's failure to complete the project, defective or non-conforming work, or cost overruns.
Draw Funds Crime
Fidelity coverage protecting against theft or conversion of construction draw funds.
Total/Constructive Total Loss gap coverage
Coverage tied to the outstanding construction loan balance if the project suffers a total physical loss, responding only to that physical loss — not to borrower default or a decline in the project's market value.
Illustrative Scenario — How This Coverage Responds
Illustrative scenario — a partial loss mid-project
A home under construction suffers significant storm damage partway through the build. The Course of Construction Property coverage responds to the physical damage to the project itself, valued against the total project cost. If the builder had also failed to complete the work to specification on a separate part of the project, the Contractor's Performance Liability coverage part is what would respond to that distinct exposure — they're separate coverage parts within the same combined policy.
Illustrative example for education only — not a claim outcome or a promise of payment. Every claim depends on the actual policy issued and its terms.
More Than One Way In
More scenarios.
Real coverage doesn't fit one story. Here's who else this shows up for.
The first lender-required draw
A construction lender tells a builder it won't release the first draw on a one-time-close loan until it sees proof of a performance-backed builder's risk policy naming the homeowner and lender as claimants and loss payees.
The multi-project builder
A builder running several one-time-close construction-to-permanent projects at once wants one program that scales across all of them, rather than binding a separate builder's risk policy project by project.
The draw-fund concern
A builder managing multiple simultaneous draws wants confirmation that the policy addresses the risk of a bookkeeping error or internal misappropriation of disbursed construction funds, not just physical damage to the jobsite.
Know The Gaps
What this doesn't cover.
Every policy has limits. Knowing them before you buy is how you avoid a denied claim later.
Debt repayment, collateral value, or anything resembling a financial or mortgage guaranty
This is property and liability insurance, not a bond or a financial guarantee — it doesn't insure the loan itself or its repayment.
Market value decline or borrower default
The gap coverage responds only to physical total loss of the project — a borrower walking away from the loan, or the project simply losing value, isn't a covered event.
Behind The Quote
What goes into the decision.
What actually moves your price and your approval — no black box.
Total project cost and completed value
Course of Construction Property coverage is valued against the total project cost, so an accurate, current project budget is what the coverage amount is actually built around — a stale budget means a mismatched limit.
Loan structure (one-time-close construction-to-permanent)
This policy is purpose-built for that specific lending structure, with the homeowner and lender named as claimants and loss payees — a different construction financing structure may need a different property policy entirely.
Builder's track record on schedule and budget
A builder's history of finishing projects on time and on budget is directly relevant to the Contractor's Performance Liability coverage part, since that's the coverage that responds to failure-to-complete and cost-overrun exposure.
Draw-fund handling and internal controls
How a builder manages incoming draw disbursements — who has authority to move funds, what reconciliation looks like — shapes the Draw Funds Crime exposure this policy is built to cover.
Getting Covered
How it actually works.
- The policy is issued to the builder as the named insured, with the homeowner and lender named as claimants and loss payees.
- Course of Construction Property coverage tracks the project's completed value as construction progresses.
- General liability, performance liability, and draw-funds crime coverage run alongside the property coverage for the full construction period.
- If a total physical loss occurs, gap coverage responds against the outstanding construction loan balance.
Let's get you covered.
Tell us what you need on Builder's Risk Plus — a licensed VAB advisor follows up personally. No bots, no runaround.
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Availability
Available nationwide, with policy terms adjusted to each state's requirements.
Questions, answered straight
No jargon on builder's risk plus — just what you're actually asking.
No — this is insurance, not a bond or guaranty. It doesn't guarantee the loan will be repaid or that the collateral will hold its value; it responds to specific insured property and liability events during construction.
All three have a stake: the builder is the named insured, and the homeowner and lender are named as claimants and loss payees, reflecting each party's interest in the project.
Yes — Contractor's Performance Liability specifically addresses exposure from cost overruns, along with failure to complete and defective or non-conforming work.
Draw Funds Crime coverage is built specifically for that — fidelity coverage against theft or conversion of the funds disbursed during construction.
It's usually issued alongside Homeowner's Construction Protection as a package for one-time-close construction-to-permanent lending — the two are built to work together, covering the builder's side and the homeowner's side of the same project.
It responds to a physical total or constructive total loss, tied to the outstanding construction loan balance — it's not a general debt-forgiveness benefit, and it doesn't respond to non-physical causes like borrower default.
Beyond This Coverage
What people in your situation also need.
VA Construction Loan
Builder's Risk Plus is built for exactly the one-time-close construction-to-permanent structure the VA Construction Loan uses — the two are natural pairs.
ExploreBuilder Partnerships
Builders running one-time-close projects through VAB are the exact audience the Builder Partnerships program is built to support.
ExploreBusiness Banking
A builder managing multiple draw-funded projects needs a business banking relationship built for construction cash flow.
ExploreRelated Coverage
Coverage people pair with this.
Homeowner's Construction Protection
Protection for the homeowner while their custom home is being built.
Learn moreProject Wrap-Up Liability
One liability policy covering every enrolled contractor on a single construction project.
Learn moreSubcontractor Default Protection
Financial protection for general contractors when an enrolled subcontractor defaults.
Learn moreReady to talk it through?
Get a quote in minutes, or ask Sgt. Savings a straight question first — no pressure, no runaround.
Insurance products described on this page are marketed by The Veteran Alliance, a licensed insurance producer, and underwritten by one or more separately licensed insurance companies, which may include Corgi Insurance Company and its affiliates. The insurer that actually underwrites your policy, its licensing status in your state, and any state-required notices will be identified in your quote and policy documents. Coverage, limits, eligibility, and pricing are determined by the underwriting insurer, may vary by state, and may change. Nothing on this page is a quote, an offer of insurance, a binder, or a guarantee of coverage — coverage takes effect only when a policy is issued.