Builders Risk Answer

Is Builders Risk Required by Lenders?

Yes — every construction lender we’ve worked with requires it. It’s not optional, it’s not negotiable, and a missing or lapsed policy will halt your draws. Here’s exactly what lenders require.

• ✓Construction lenders universally require builders risk
• ✓Lender must be named as loss payee on the policy
• ✓Specific requirements on limits, deductibles, and form
• ✓We provide lender-acceptable binders and certificates same day

The Direct Answer

Yes. Construction lenders — banks, credit unions, private lenders, SBA construction programs — universally require builders risk insurance as a condition of funding. This is non-negotiable. The lender is financing the collateral (the building under construction) and they require that collateral to be insured while it’s being built.

We’ve seen lenders kill closings 48 hours before funding because the builder didn’t have a current builders risk binder in the loan file. The builder had GL, had workers comp, had everything else — but no builders risk. The closing was delayed two days while we placed the policy and delivered the binder.

Lender-specific requirements typically include: coverage in an amount equal to 100% of completed project value, lender named as loss payee (or additional insured), deductible caps (many lenders cap the deductible at $10,000 or 5% of insured value), open perils form preferred, and evidence of insurance delivered in a specific format.

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Lender Waiting on Builders Risk? We Deliver Same-Day

Lender-formatted binders and certificates. Every coverage requirement met.