Builders Risk Answer

Does Builders Risk Cover Faulty Workmanship?

No — the defective work itself is excluded. But the damage caused by faulty workmanship may be covered. Here’s exactly where this line is drawn and why it matters.

• ✓Faulty workmanship: excluded — cannot be covered
• ✓Resulting damage from faulty work: potentially covered
• ✓Defective design, materials, or methods: also excluded
• ✓We review this distinction with every client before binding

The Direct Answer

No. Builders risk insurance does not cover the cost to repair, tear out, or replace defective or faulty workmanship. This exclusion is universal across all builders risk policies. If a section of framing was done incorrectly and needs to be redone, the builders risk policy doesn’t pay for that.

However — and this is an important distinction — builders risk may cover damage that results from faulty workmanship, even when the underlying defect isn’t covered. Here’s the classic example: an electrician improperly installs a junction box. Two months later, arcing causes a fire. The fire destroys $60,000 of framing and finished work.

The builders risk policy covers the fire damage — because fire is a covered peril. It does not cover the cost to fix the improper junction box installation itself. The resulting damage is covered; the defective work is not.

This ‘resulting damage’ coverage can be significant. Understanding exactly where the line falls between excluded defective work and covered resulting damage is a coverage question that sometimes requires legal interpretation — and is worth discussing with us before a loss, not during one.

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We Explain Every Exclusion Before You Bind — So You Know What You Have

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