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VGD: Protecting Your Construction Investment.

Navigating builder’s risk insurance claims can be overwhelming, especially when insurers delay, undervalue, or outright deny rightful compensation. According to the National Association of Home Builders (NAHB, 2023), U.S. construction costs increased by 19% between 2020 and 2022, making adequate builder’s risk insurance more crucial than ever. Vargas Gonzalez Delombard, LLP, leverages our extensive expertise in construction law to fight for property owners, contractors, and developers facing unfair claim denials. With a proven track record of securing substantial settlements, we hold insurance companies accountable and ensure you receive the coverage you were promised. Don’t let an insurance dispute jeopardize your project—schedule a consultation today and let us protect your construction investment.

Legal Considerations & Your Rights

Builder’s risk insurance is a crucial policy designed to cover financial losses due to property damage or loss during construction. Property owners, contractors, and subcontractors often secure these policies to protect their investments from various risks, including fire, theft, and weather-related damage. These policies help safeguard substantial financial interests in projects worth millions or even billions of dollars. Given the high value of construction projects, resolving builder's risk insurance claims is often complex. Insurance companies may attempt to minimize payouts or deny claims altogether, leaving policyholders with substantial financial burdens.

How Builder’s Risk Insurance Works in Orlando

This type of insurance functions similarly to policies in other states, offering temporary coverage for the duration of a project. However, Florida’s unique climate and regulatory environment make it essential to carefully review policies for specific coverage details and ensure adequate protection against extreme weather risks. Factors affecting policy cost include the following:

  1. Project Type: New builds vs. renovations affect pricing.
  2. Location: Areas prone to hurricanes or flooding increase costs.
  3. Construction Type & Materials: More expensive materials lead to higher premiums.
  4. Project Duration: Longer projects may cost more to insure.
  5. Coverage Amount: Higher coverage leads to higher premiums.
  6. Contractor Expertise & Claims History: Experienced contractors often receive lower rates.
  7. Deductibles: Higher deductibles reduce premiums but increase out-of-pocket costs during claims.

A well-structured policy should provide full coverage for any reasonably foreseeable risks, but insurers frequently insert limitations that can severely impact your ability to recover damages. Reviewing the fine print with a legal expert can help prevent unwelcome surprises.

What Builder’s Risk Covers in Florida

While builder's risk insurance policies vary, they typically cover damages caused by the following:

  • Fire
  • Hail and windstorms
  • Lightning
  • Hurricanes
  • Explosions
  • Theft and vandalism
  • Faulty design
  • Flawed materials
  • Negligent workmanship
  • Labor costs

However, many policies exclude certain types of damage unless additional coverage is purchased, such as:

  • Flooding and water damage, which accounted for $3.5 billion in property losses in Florida in 2022, according to FEMA, 2023
  • Earthquakes
  • Employee theft
  • Weather damage to property in open-air

Because policy exclusions can be ambiguous, consulting VGD before purchasing a policy or immediately upon encountering a dispute can help protect your rights and ensure adequate coverage.

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Common Builder’s Risk Insurance Disputes

Insurers often assess claims based on the lowest-cost option—repair, rebuild, or replacement. This can create complications, particularly when cost evaluations are conducted using different sites or valuation methods. Challenging these valuations requires an in-depth understanding of policy language, construction costs, and legal precedents. Some other examples of common reasons for denied or undervalued claims include the following:

  • Damage occurring after construction was completed
  • Policy limits deemed insufficient to cover losses
  • Preexisting damage or damage occurring before construction
  • Exclusions or policy loopholes limiting coverage

In Florida, the statute of limitations for breach of contract claims is five years from the date of loss. Delaying action can weaken your case and limit your legal options, so it’s crucial to act swiftly.

What Should I Do if My Builder’s Risk Insurance Claim is Denied?

If your builder’s risk insurance claim is denied, don’t assume the insurer’s decision is final. Many denials are based on ambiguous policy language, misinterpretations, or bad-faith tactics designed to minimize payouts. Here’s what you should do next:

Review Your Policy Carefully

Examine the terms, exclusions, and coverage limits to determine whether the denial is justified. Insurers sometimes misapply policy exclusions or fail to assess damages properly.

Request a Written Explanation

Ask the insurance company to provide a formal denial letter outlining the specific reasons for their decision. This documentation is essential for challenging the denial.

Gather Supporting Evidence

Collect relevant documentation, including photos, repair estimates, construction records, and correspondence with the insurer. Substantial evidence can help support your case.

File an Appeal

Most insurance companies have an internal appeals process. Submitting a well-documented appeal with additional proof of damages can sometimes reverse the denial.

Consult a Legal Professional at VGD

Legal representation may be necessary if your appeal is unsuccessful or the insurer is acting in bad faith. Our skilled attorneys can negotiate on your behalf, present a strong case, and, if needed, take legal action to ensure you receive the compensation you are entitled to.

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Why Choose Vargas Gonzalez Delombard, LLP? We Make Insurance Companies Pay.

Construction projects are significant financial investments, and insurance companies should uphold their contractual obligations. Unfortunately, insurers often use delays, technicalities, and vague policy language to minimize payouts or deny claims outright.

At Vargas Gonzalez Delombard, LLP, we combine legal expertise, deep industry knowledge, and aggressive advocacy to fight for our clients. Our attorneys have successfully helped construction professionals and property owners recover millions in unpaid claims. We pride ourselves on our track record of results, ethical approach, and commitment to client advocacy.

Here’s what sets us apart:

  • Decades of experience in construction law and insurance litigation
  • Proven success in securing high-value settlements and verdicts
  • Client-focused service with personalized legal strategies
  • Contingency-based representation—pay nothing unless we win your case
  • Relentless pursuit of justice against insurance companies

If you’re struggling with a denial of an unfair builder’s risk insurance claim, contact Vargas Gonzalez Delombard, LLP today to schedule a consultation and protect your construction investment.

Builder’s Risk Insurance FAQ

Does Builders Risk Insurance Cover Liability?

Can I Extend My Builder’s Risk Insurance If My Construction Project Is Delayed?

What Happens to My Builder’s Risk Insurance Once Construction Is Finished?

Does Builder’s Risk Insurance Cover Damage Caused by Subcontractors?

Are Soft Costs Included in a Builder’s Risk Insurance Policy?

Can I Purchase Builder’s Risk Insurance Midway Through a Project?

What Happens if My Construction Project Is Delayed Beyond the Policy Term?

Does Builder’s Risk Insurance Cover Equipment and Tools?

How Can I Lower the Cost of Builder’s Risk Insurance?

Does Builders Risk Insurance Cover Liability?

No, builder's risk insurance strictly covers property damage, not liability claims. Additional general liability insurance is required for legal protection against injuries or property damage caused by construction activities.

Can I Extend My Builder’s Risk Insurance If My Construction Project Is Delayed?

Yes, policies are issued for a set timeframe, but extensions are often available if your project takes longer than planned. To prevent a coverage gap, requesting an extension before the policy expires is essential. Extending the policy may incur additional costs, so discussing this with your insurer in advance ensures seamless protection.

What Happens to My Builder’s Risk Insurance Once Construction Is Finished?

When construction is completed, the builder's risk insurance coverage ends. At this stage, securing a permanent insurance policy—such as Commercial Property Insurance—is recommended to protect the structure from risks like fire, theft, or natural disasters. Transitioning to long-term coverage ensures continued financial security for the newly completed building.

Does Builder’s Risk Insurance Cover Damage Caused by Subcontractors?

Typically, builder’s risk insurance includes coverage for damages caused by subcontractors working on the project. However, policy terms can vary, so reviewing your specific coverage is essential. If damages caused by subcontractors are not fully covered, requiring them to carry their own general liability insurance can offer additional protection and reduce financial risk.

Are Soft Costs Included in a Builder’s Risk Insurance Policy?

Soft costs, such as loan interest, legal fees, and additional expenses related to construction delays, may be covered if explicitly included in the policy. Since standard policies do not automatically cover these expenses, adding an endorsement may be necessary. Ensuring soft cost coverage can help minimize financial losses from unforeseen delays or disruptions.

Can I Purchase Builder’s Risk Insurance Midway Through a Project?

Yes, you can obtain builder’s risk insurance after construction has already begun, but it may be more challenging. Some insurers may impose restrictions or charge higher premiums due to increased risks. It’s best to secure a policy before breaking ground to ensure continuous protection and avoid coverage gaps.

What Happens if My Construction Project Is Delayed Beyond the Policy Term?

If your project exceeds the original policy term, you may be able to request an extension. However, approval is not guaranteed, and additional premiums may apply. If an extension is unavailable, securing a new policy before the original one expires is crucial to maintaining coverage throughout the remainder of the project.

Does Builder’s Risk Insurance Cover Equipment and Tools?

Standard builder’s risk insurance primarily covers the structure and materials used in the project. Equipment and tools are generally not covered unless explicitly stated in the policy or added as an endorsement. Contractors should consider purchasing inland marine insurance or a separate equipment policy for adequate protection against theft or damage.

How Can I Lower the Cost of Builder’s Risk Insurance?

Enhancing site security, using high-quality materials, and hiring reputable contractors with strong safety records can help lower premiums. Opting for a higher deductible may also reduce costs. Additionally, bundling Builder’s Risk Insurance with other policies from the same provider can lead to discounts.

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