Give Vargas Gonzalez Delombard, LLP a phone call at ORL (407) 794-3056 Give Vargas Gonzalez Delombard, LLP a phone call at MIA (305) 224-6387 Give Vargas Gonzalez Delombard, LLP a phone call at TX (469) 213-2237 Give Vargas Gonzalez Delombard, LLP a phone call at DEN (720) 442-0370 Give Vargas Gonzalez Delombard, LLP a phone call at NY (347) 808-4890
Free Case Evaluation

VGD: Resolving Builder’s Risk Insurance Disputes in New York

At Vargas Gonzalez Delombard, LLP, our decades‑long track record and focused insurance‑coverage practice empower us to safeguard New York construction projects when builder’s risk claims are underpaid, delayed, or denied. From dissecting every clause to assembling irrefutable documentation and pressure‑testing the insurer’s valuation, we pursue the full benefits your policy promises. Contact us today to book your consultation.

What Is Builder’s Risk Insurance—and What Does It Cover?

Builder’s risk insurance is a specialized, short-term policy to protect owners, developers, contractors, and subcontractors from financial loss during active construction.

It covers the cost of repairing or replacing materials, equipment, and partially completed work when a job site is impacted by unexpected events such as:

  • Fire or smoke damage
  • Theft or vandalism
  • Wind and hail
  • Explosions or lightning strikes
  • Vehicle or aircraft impacts

Some insurance policies offer additional endorsements for specific risks such as design defects, flood damage, or earthquake damage, but these usually come with extra costs.

In New York, where every construction phase involves significant investments in permits, labor, custom materials, and strict timelines, this type of insurance is crucial for safeguarding the physical site and the project's financial stability.

However, obtaining fair compensation from the insurer can be difficult. When this occurs, project owners or general contractors may have to bear the costs of reorders, payroll, and schedule penalties—expenses that can increase rapidly without the protection the policy intends to provide.

Exclusions and Limitations in New York Builder’s Risk Policies

Although builder’s risk insurance provides valuable protection, it doesn’t cover everything. Most policies include exclusions for specific types of damage—unless additional endorsements are purchased to extend coverage.

Standard exclusions in New York policies may include:

  • Flood or water intrusion
  • Earthquake damage
  • Employee dishonesty or internal theft
  • Normal wear and tear
  • Defective workmanship or design flaws
  • Pre-existing conditions at the job site

Common Builder’s Risk Insurance Disputes

Denials for Covered Events

Insurers may reject claims stemming from incidents like fire, theft, or vandalism by asserting the damage was excluded, not sudden, or pre-existing, despite clear policy terms suggesting coverage.

Undervalued Loss Assessments

Insurance carriers often issue repair or replacement estimates that fall significantly below actual construction costs, putting the project at risk and forcing developers to absorb unplanned expenses.

Payment Delays That Disrupt Timelines

In a state where construction is tightly scheduled and expensive, delays in insurance payouts can stall progress, strain cash flow, and trigger penalties or lost revenue.

Overextended Policy Exclusions

Most builders’ risk policies include exclusions, but insurers may attempt to broaden those exclusions to deny legitimate claims. Careful legal review is often required to challenge these interpretations and enforce coverage.

Disputes Around Project Completion Status

Damage occurring late in a project can spark disagreements over whether coverage has expired. Insurers may argue that the site was no longer “under construction,” leading to contentious and costly legal disputes.

Background media

Your Rights Under New York Law

New York Insurance Law § 2601 makes it illegal for insurers to engage in unfair claim‑settlement practices, and Regulation 64 (11 NYRR 216) sets detailed standards for prompt investigation and equitable payment.

Violations can lead to regulatory penalties and strengthen a policyholder’s case for breach of contract or bad faith. If your builder’s risk claim is being delayed, denied, or underpaid, consider the following steps:

  • Demand compliance with § 2601 and Regulation 64 by citing specific lapses in the insurer’s claim-handling timeline
  • Pursue breach-of-contract damages to recover the full policy benefits, along with interest
  • Seek extracontractual or punitive damages in severe bad-faith situations, or file a General Business Law § 349 action for deceptive practices

Taking swift legal action balances the situation and pressures the insurer to fulfill its obligations before your project’s cash flow is severely impacted.

Why Legal Representation Matters in Builder’s Risk Insurance Disputes

When a builder’s risk insurance claim is delayed, underpaid, or denied, skilled legal representation can distinguish between a failed project and a fully funded recovery.

We advocate for policyholders across New York by:

  • Analyzing policy language to clarify coverage, exclusions, and endorsement rights
  • Collecting and organizing evidence—including damage assessments, invoices, and construction timelines—to support your claim
  • Engaging directly with insurers to challenge undervaluations and push for timely, fair settlements
  • Pursuing litigation when carriers act in bad faith or violate New York’s claim handling standards


Our deep knowledge of builder risk policies and New York’s legal framework ensures your claim is handled correctly and your investment is protected.

Banner media

FAQ's

Who typically purchases builder’s risk insurance in New York?

Does builder’s risk insurance cover subcontractors?

How long does builder’s risk insurance coverage last?

What types of construction projects qualify for builder’s risk insurance?

Can builder’s risk insurance be cancelled mid-project?

How is the insured value of a builder’s risk policy determined?

Is builder’s risk insurance required by law in New York?

Who typically purchases builder’s risk insurance in New York?

The project owner or general contractor usually purchases builder’s risk insurance, but it can also be secured by developers, construction managers, or even lenders, depending on who carries the financial risk. In NY, where projects often involve multiple stakeholders, policies may be structured to cover all parties with an insurable interest.

Does builder’s risk insurance cover subcontractors?

Subcontractors are not automatically covered. While the general contractor or owner’s policy may extend coverage to subcontractors, the policy must be reviewed to confirm whether they are named insureds or additional insureds. Otherwise, subcontractors may need their own protection.

How long does builder’s risk insurance coverage last?

Coverage typically lasts for the duration of construction, often ending upon project completion or when the property is occupied or put to its intended use. In NY, where delays can be common due to permitting or inspections, extensions may be necessary to maintain protection through project closeout.

What types of construction projects qualify for builder’s risk insurance?

Builder’s risk coverage applies to many projects, including new builds, major renovations, tenant improvements, and structural alterations.

Can builder’s risk insurance be cancelled mid-project?

Yes, but it’s risky. Cancellation may occur due to non-payment, misrepresentation, or project abandonment. If coverage lapses before completion, the financial exposure can be enormous. Continuous coverage is strongly recommended in NY, where permitting, weather, and logistics complicate builds.

How is the insured value of a builder’s risk policy determined?

The policy limit is generally based on the estimated completed value of the structure, including materials, labor, and overhead, but not land value. Accurately projecting this amount is essential, especially in high-cost NY markets, to avoid being underinsured.

Is builder’s risk insurance required by law in New York?

Builder’s risk insurance is not legally mandated by New York State, but lenders, municipalities, or project stakeholders often contractually require it. Many NY projects, especially those involving financing or public funds, cannot proceed without proof of builder’s risk coverage.

Safeguard Your Construction Investment with Strategic Legal Advocacy from Vargas Gonzalez Delombard, LLP

At Vargas Gonzalez Delombard, LLP, we represent developers, contractors, and property owners throughout New York in builder’s risk insurance disputes. Our attorneys bring deep expertise in New York insurance law and a proven track record of resolving complex claims through negotiation, arbitration, or litigation.

We work proactively to reduce the risk of disputes by advising clients on coverage gaps and exclusions before issues arise. And when claims are mishandled or wrongfully denied, we step in with aggressive, results-driven advocacy to hold insurers accountable and recover the compensation you’re entitled to.

Trust Vargas Gonzalez Delombard, LLP to protect your construction investment. Schedule a consultation today and let us help you confidently move your project forward.

This field is required.
Subscribe

Free Claims Consultation Tell Us About Your Case

Get a Free Case Evaluation
Contact us media
Accessibility: If you are vision-impaired or have some other impairment covered by the Americans with Disabilities Act or a similar law, and you wish to discuss potential accommodations related to using this website, please contact our Accessibility Manager at (347) 808-4890.
Contact Us