Final answer:
Builders risk insurance ends upon expiration of the policy term, completion of the construction project, or cancellation by the insured. It does not end due to a covered loss, as that's when the policy is supposed to provide coverage. This insurance is comparable to car or health insurance, which pay out upon the occurrence of covered events.
Step-by-step explanation:
The coverage under the builders risk form will end in various situations, but not in the event of a covered loss. In fact, the existence of a covered loss is precisely when the policy is intended to respond or pay out. Coverage will typically terminate when one of the following occurs:
- Expiration of the policy term
- Completion of the construction project
- Cancellation by the insured
Builders risk insurance is designed to protect a construction project against losses due to damages such as fire, weather impacts, vandalism, or theft. The coverage helps ensure that medical expenses or other costs associated with these losses are addressed, similar to how other insurance forms payout for their covered risks, like car insurance paying out when a car is damaged or stolen, or health insurance covering medical expenses incurred.