Final answer:
Builder's risk insurance coverage ends when construction is abandoned, which can be either voluntary or involuntary, and it's crucial for policyholders to know the conditions that can cause their coverage to terminate.
Step-by-step explanation:
In the context of builder's risk insurance, coverage typically ends when construction is abandoned, and this can occur in two ways: it can be abandoned voluntarily or involuntarily. Voluntary abandonment happens when the decision to stop construction is made by the project owner or the builder, often due to factors like financial difficulty or a change in project scope. Involuntary abandonment can be the result of uncontrollable circumstances such as natural disasters, regulatory changes, or legal disputes that prevent the project from continuing. It's important for policyholders to understand the conditions under which their builder's risk insurance may terminate, as this can have significant financial implications for the construction project.