Your building is covered. The soft costs decide what a delay costs you.

Texas Builders Risk Insurance covers direct physical loss to the building under construction, materials and supplies on site or in transit, temporary structures and scaffolding, and soft costs of delay including additional architectural fees, additional financing interest, additional legal fees, and additional taxes. The Insurance Services Office Builders Risk Coverage Form (BR 00 06) is the standard foundation form. Coverage typically applies from groundbreaking through substantial completion. The most common Texas Builders Risk claim drivers are theft of materials (copper, lumber, HVAC units, appliances, electrical wire), fire from hot work activities (welding, cutting, brazing, soldering), water damage during the build (plumbing failures, weather, freeze during winter months), wind and hail damage to incomplete structures, and vandalism during off-hours.

Texas construction sites carry meaningful theft exposure for materials, tools, equipment, copper, HVAC, and appliances. The McDade Builders Risk Review evaluates theft coverage, sub-limits, off-site storage, in-transit coverage, security requirements, and how the policy transitions when the project reaches substantial completion.

Soft costs are the indirect expenses that accumulate when a covered loss delays project completion. Soft costs typically include additional architectural and engineering fees for revised plans, additional financing interest on construction loans extended beyond the original completion date, additional legal fees for permit re-applications and contract amendments, additional permit and inspection fees, additional taxes including property taxes accrued during the delay, additional advertising and marketing expense, and additional administrative cost. Soft costs are not covered by the standard Builders Risk Coverage Form unless specifically added by endorsement. Soft cost coverage carries a separate sub-limit. The soft costs endorsement is the most common missing endorsement on Texas Builders Risk policies. A 6-month delay on a Texas commercial project routinely produces 50,000 to 250,000 dollars in soft costs depending on project size.

Texas Insurance Code Chapter 151, the Texas Anti-Indemnity Act, limits broad-form indemnification in construction contracts. A construction contract generally cannot require an indemnitor to defend or indemnify another party for that party's own negligence. The Act interacts with Builders Risk programs in several ways. Additional Insured endorsements on Builders Risk policies that would otherwise extend coverage to general contractors or project owners for their own negligence may be limited by Chapter 151. Wrap-up programs (OCIP and CCIP) require careful coordination with Chapter 151 because the wrap-up's combined coverage structure interacts with the indemnity language in subcontracts. The McDade Builders Risk Review evaluates the Anti-Indemnity Act exposure on each project.

A hot work exclusion or sub-limit applies to losses caused by welding, cutting, brazing, soldering, grinding, and other operations that produce heat, sparks, or flame. Hot work is one of the largest fire-loss drivers on Texas construction projects. Most Texas Builders Risk policies exclude or sub-limit hot work losses unless a documented Hot Work Permit Program is in place per NFPA 51B Standard for Fire Prevention During Welding, Cutting, and Other Hot Work. The permit program typically requires written authorization for each hot work operation, fire watch personnel during and after hot work, removal of combustibles from the work area, fire extinguishers available, and documented inspection. The McDade Review evaluates the hot work endorsement and the permit program implementation on each project.

A wrap-up program is a project-specific insurance program that bundles General Liability, Builders Risk, Workers Compensation, and Pollution Liability for the project across all enrolled contractors and subcontractors at the project. Owner-Controlled Insurance Programs (OCIP) are sponsored by the project owner. Contractor-Controlled Insurance Programs (CCIP) are sponsored by the general contractor. Wrap-up programs typically make sense for Texas projects exceeding 50,000,000 to 100,000,000 dollars in construction value, projects with high subcontractor counts (often 50 or more), and projects where the general contractor or owner can capture insurance cost savings through bulk purchase. Texas wrap-up programs require coordination with the Anti-Indemnity Act (Chapter 151), the Texas Trust Fund Act (Property Code Chapter 162), and Texas Workers Compensation subscription decisions.

Builders Risk Insurance typically terminates at substantial completion (commissioning, certificate of occupancy, or owner acceptance, depending on policy language). At that point, standard Commercial Property coverage takes over for the building. The transition window matters significantly. A gap between Builders Risk termination and Commercial Property attachment exposes the building to loss with no coverage. An overlap creates redundant premium expense. The McDade Builders Risk Review coordinates the substantial completion definition in the Builders Risk policy with the inception date of the Commercial Property policy to ensure continuous coverage without gap and without redundancy.

A price escalation endorsement extends Builders Risk coverage to compensate for material and labor cost inflation between policy inception and the time of a covered loss. Without the endorsement, the policy pays based on cost at inception, which may fall short of actual replacement cost if material prices have risen meaningfully during the project. The endorsement typically activates above stated thresholds (5 to 10 percent inflation) and pays the inflated cost up to a stated limit. Given the material cost volatility since 2020 in Texas (lumber, copper, steel, concrete, glass, HVAC components), the price escalation endorsement is now standard on most McDade-reviewed Texas Builders Risk policies.

The McDade Texas Builders Risk Review is an audit of your existing Builders Risk policy by Dallas Downey, CLCS, with the McDade commercial team. The review evaluates five primary areas. First, theft coverage and sub-limits against current Texas jobsite theft exposure. Second, soft costs coverage and limit against your project schedule and financial profile. Third, the hot work exclusion and the implementation of a Hot Work Permit Program per NFPA 51B. Fourth, the Texas Anti-Indemnity Act interaction with the Additional Insured endorsements on the policy and with the indemnity language in your construction contracts. Fifth, the transition coordination between Builders Risk substantial completion and Commercial Property inception. About 40 percent of the time the review confirms the current carrier and policy structure are correct. The other 60 percent identifies sub-limit, endorsement, or coordination opportunities.

Dallas Downey, CLCS leads the McDade commercial insurance team including Texas Builders Risk. Dallas holds the Certified Lines Coverage Specialist designation and routes commercial conversations through a dedicated commercial meeting calendar. The McDade office serves the Houston metropolitan area including Spring, Klein, Tomball, Cypress, The Woodlands, Conroe, Humble, Katy, and Bridgeland, plus all of Texas through Premier Group Insurance carrier access including 50+ top Texas carriers we know well. McDade Insurance Brokerage Group is licensed by the Texas Department of Insurance (Texas License 2539471). Schedule a commercial review with Dallas through the commercial routing on this page or call the McDade office at 281.378.5002.