Builders Risk Coverage: Navigating Hard and Soft Costs, Delay in Opening Expenses and Construction Delay Measurement

Strategies for Contractors and Insurers to Resolve Recurring and Costly Disputes

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, November 18, 2015

Recorded event now available

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Course Materials

This CLE program will discuss the scope of coverage for builders risk insurance coverage, how to measure and prove construction delays, and the common areas of disputes between contractors and insurers such as defective design and workmanship, ensuing loss and length of delay.


Builders risk policies generally cover all risks of property damage during construction unless specifically excluded. These policies cover loss caused by external causes, as well as—subject to exclusions and limitations—property damage caused by acts of third parties and damage due to negligence of contractors or subcontractors.

Builders risk losses consist of three key components: hard costs, soft costs, and business income or loss of rents. Hard costs are the cost of the material and labor. Soft costs are those expenses resulting from a delay in opening such as additional loan interest, taxes, marketing and re-leasing expenses, administrative expenses, and architectural/engineering fees. Business income or loss of rents cover the result of a delayed project completion when caused by property damage.

Recovery for defective design and workmanship is limited to situations in which it causes property damage to other non-defective work. If the policy exclusion includes an ensuing loss provision the cost of repairing the faulty work is excluded, but the damage to other property ensuing from the faulty work is covered.

Listen as our authoritative panel of construction attorneys guides you through builders risk insurance coverage and discusses how to measure and prove construction delays. The panel will address common areas of disputes between contractors and insurers such as defective design and workmanship, ensuing loss, and length of delay.



  1. Scope of coverage
    1. Hard costs
    2. Soft costs
    3. Delay in opening
  2. Measuring construction delay
    1. Delay in construction schedule
    2. Period of business interruption and restoration
    3. Delay due to contractor or subcontractor default
  3. Coverage for “ensuing loss” regulating from defective design or workmanship


The panel will address these and other key issues:

  • What are the common business interruption issues that arise in the context of builders risk claims?
  • What are the common schedule analysis methodologies for measuring construction delay?
  • What is the difference between period of restoration and period of indemnity?
  • How have various courts interpreted conduct that constitutes defective workmanship?


Dan Millea
Dan Millea

Zelle Hofmann Voelbel & Mason

Mr. Millea’s practice is focused on property insurance, reinsurance and financial services litigation. He has...  |  Read More

Pepe, Michael
Michael V. Pepe

Saxe Doernberger & Vita

Mr. Pepe focuses his practice on complex insurance coverage issues on behalf of policyholders, and has advocated for...  |  Read More

Wilson, William
William D. Wilson

Mound Cotton Wollan & Greengrass

Mr. Wilson has over 20 years of experience in all aspects of commercial litigation. His practice includes...  |  Read More

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