Select the value to solve for, enter the other three values, and select Calculate. Estimate premium using project value, construction duration and an annual insurance rate, or reverse the same prorating model.

Use an annual insurance rate for a simple prorated estimate. Actual policy pricing may differ.

Insured project value in US dollars.

Coverage duration used for prorating; fractional months are allowed.

Annual rate, not a full-project rate. Enter 1 for 1%.

Related Calculators

Builders Risk Insurance Cost Formula

The following equation gives a simplified builders risk premium estimate when an annual insurance rate is prorated by months of coverage. Actual policy premiums may include minimum charges, fees and underwriting adjustments; this is not an insurer quote.

BRIC = BV × IR × (T / 12)
  • Where BRIC is the Builders Risk Insurance Cost ($)
  • BV is the total project value ($)
  • IR is the annual insurance rate as a decimal (enter 1 in the calculator for 1%, equivalent to 0.01 in this formula)
  • T is the construction duration (months)

To calculate the builders risk insurance cost, multiply the project value by the annual insurance rate as a decimal, then multiply by the construction duration in months divided by 12.

What is a Builders Risk Insurance Cost?

Definition:

Builders risk insurance cost refers to the premium paid for coverage during a construction project, protecting against damages such as fire, theft, vandalism, or other potential losses until the project is completed.

How to Calculate Builders Risk Insurance Cost?

Example Problem:

The following example outlines the steps and information needed to calculate the Builders Risk Insurance Cost.

First, determine the total project value. In this example, the total insured value is $500,000.

Next, determine the insurance rate. In this example, the assumed annual rate is 1% (0.01).

Then, determine the construction duration. Here, the duration is set to 6 months.

Finally, calculate the Builders Risk Insurance Cost using the formula above:

BRIC = BV × IR × (T / 12)

BRIC = $500,000 × 0.01 × (6 / 12)

BRIC = $2,500

FAQ

What does builders risk insurance typically cover?

Builders risk insurance commonly covers damages caused by risks such as fire, theft, vandalism, certain weather events, and other hazards that can happen during the course of construction. Covered hazards, exclusions and optional flood or earthquake coverage depend on the policy; check the actual terms.

Can builders risk insurance be extended beyond initial coverage terms?

If construction is delayed, ask the insurer whether an extension is available and what premium and conditions apply. The calculator cannot predict extension pricing or approval. It’s important to review your policy details and notify the insurer if you anticipate construction delays.

Who typically purchases builders risk insurance?

Builders risk insurance is typically purchased by project owners, general contractors, or developers. The policy holder varies depending on the contractual agreements and laws in the project’s location. A lender or construction contract may require coverage; check the requirements for the specific project.