Which Coverage Does What on a Jobsite?

Installation Floater vs Builder’s Risk – What’s the Difference?

In construction, no two projects are alike—and neither are the insurance policies that protect them. When it comes to covering materials and work in progress, contractors often ask: Do I need a builder’s risk policy, or will an installation floater do the job? While both fall under inland marine insurance and protect against loss during a build, they serve different roles. Understanding the difference helps ensure you don’t leave any materials—or responsibilities—exposed.

Builder’s Risk Covers the Whole Project – Installation Floaters Cover What You Bring to It

At its core, Builder’s Risk Insurance is designed for the entire building or structure under construction. When purchased by the general contractor it protects everyone's interests in the total project value from damage caused by events like fire, wind, theft, or vandalism.

Installation Floater Insurance, on the other hand, is geared toward subcontractors or trades who are delivering and installing specific materials or systems. It covers only those items—like custom cabinets, HVAC systems, or plumbing assemblies—from the time they leave your possession until they’re installed and accepted by the customer. If you’re a subcontractor in Arizona handling expensive equipment or materials, and the project doesn’t have a builder’s risk policy, an installation floater might be your only line of defense.

What Each Policy Actually Covers

Builder’s Risk:

• The full structure and all materials and supplies on site for that build
• Losses due to fire, theft, vandalism, and weather (depending on the policy)
• May include temporary structures or materials in storage
• Protects everyone that is involved with the project: the owner, builder, subs and bank.
  

Installation Floater:

• Materials, fixtures, or equipment you’re responsible for installing
• Coverage starts when items leave your warehouse or supplier
• Follows them in transit, during storage at the site, and through installation
• Ideal for plumbers, electricians, HVAC contractors, and other subs
  

Who Typically Buys What?

• Builder’s Risk is typically secured by general contractors or project owners—especially for ground-up construction or major renovations across Phoenix, Scottsdale, and throughout Arizona.
  
• Installation Floaters are more common among subcontractors, especially when it’s unclear if they’re covered under the GC’s policy—or when working on smaller jobs where a full builder’s risk policy wasn’t purchased.
  
  

Sometimes, a GC might use an installation floater for quick-turn or smaller-value builds instead of issuing a full builder’s risk policy.

Coverage Periods – From Start to Finish (or Just Your Part)

 A Builder’s Risk policy usually lasts from the start of construction to the end—often until the project is completed or the owner takes possession.



An Installation Floater can be:

• Project-specific, tied to a single installation job
• Or ongoing, for contractors who frequently have multiple jobs in progress with active materials in transit or waiting to be installed
  

Overlap, Gaps & Why Coordination Matters

If a project is covered by a strong builder’s risk policy, subcontractors may already be protected. But don’t assume—some builder’s risk policies exclude certain subs or don’t adequately cover materials not yet installed. When there’s no builder’s risk policy in place, the subcontractor becomes solely responsible for their materials—and that’s when an installation floater is essential.



JP Insurance Group helps contractors clarify exactly who’s insuring what. If you’re ever unsure whether you’re covered by the GC’s policy, we can help you evaluate the contract and build the right protection into your own policy.

Let’s Put It Into Perspective

Picture this: You’re an electrical contractor delivering $60,000 worth of lighting systems to a commercial build in Mesa. The GC doesn’t carry builder’s risk. Before installation, a weekend break-in wipes out your materials. If you don’t have an installation floater in place, you could be eating that loss. But if you do, your policy can cover the cost to replace what was stolen.

Now consider the GC’s point of view: they’re managing a multi-million-dollar build. A storm blows the roof off mid-project. With a builder’s risk policy, they’ve got the backing to recover and keep the project moving.

Make Sure You’re Covered Until the Job’s Done

Whether you’re a GC or a subcontractor, it’s critical to match your policy to your role on the project. Builder’s Risk Insurance covers the big picture. Installation Floaters cover what you bring to the table. In some cases, you may need both to keep everything covered from the first delivery to final sign-off.