Which insurance policy type must the Owner carry for the full insurable value of the work?

• A. Specified Peril
• B. Liability Insurance
• C. All-Risk
• D. Property Insurance

Answer: (C)

Protecting the project value during construction is best achieved with an all-risk property insurance policy, often called builder’s risk coverage. This broad form covers the vast majority of risks that could damage the work—fire, wind, theft, vandalism, and many other perils—up to the full insurable value of the project. Having this level of coverage ensures funds are available to repair or replace the work if a loss occurs, without gaps in protection.

A specified peril policy would only cover a narrow list of named risks, leaving other common threats uninsured. Liability insurance, while important, protects against third‑party claims and injuries, not damage to the project itself. Property insurance is a general term, but the all-risk form is the standard choice for insuring the work for its full value during construction.