What type of insurance typically covers property damage incurred during a construction project?

Builders risk insurance is specifically designed to provide coverage for property damage that occurs during the course of a construction project. This type of insurance protects the structure being built, as well as materials, fixtures, and equipment used in the construction process. It usually covers events such as theft, vandalism, and various forms of physical damage, which are common risks during construction.

In the context of construction, builders risk insurance is essential because it addresses the unique circumstances involved, ensuring that both property owners and builders are protected financially from losses that could otherwise derail a project. This makes it a fundamental requirement for most construction projects, especially those involving significant investments.

Other types of insurance such as business income or legal liability do not directly address the specific needs associated with property damage during construction projects. Business income insurance focuses on a business's lost income rather than physical property, while legal liability insurance typically covers claims made against a party for losses caused to others, rather than damage to the construction project itself. Building and personal property insurance might cover completed structures or personal property but not the specific risks associated with ongoing construction activities. Therefore, builders risk is the most appropriate choice in this scenario.