Certified Professional in Health Care Risk Management (CPHRM) Practice Exam 2026 - Free CPHRM Practice Questions and Study Guide

Builders risk insurance is designed to provide coverage for buildings under construction, encompassing various risks involved in the construction phase. However, it does not cover certain liabilities, particularly those relating to injuries to construction workers on the job site.

Injuries to workers are typically covered under workers' compensation insurance, which is distinct from builders risk insurance. This segregation exists because workers’ compensation is specifically tailored to handle the legal responsibilities of employers regarding employee injuries. On the other hand, builders risk insurance focuses on the physical structure and materials involved in the construction process, protecting against loss or damage resulting from events like fire, theft, or certain weather-related incidents.

Understanding the boundaries of builders risk insurance is crucial for proper risk management in construction projects, allowing for the appropriate allocation of coverage among different types of insurance policies. This clarification of coverage helps in ensuring that all potential risks are properly insured, resulting in a more comprehensive risk management strategy for construction projects.