What happens to Builders Risk coverage if the project is abandoned?

When a construction project is abandoned, Builders Risk coverage typically ceases immediately. This is because Builders Risk insurance is designed to cover property under construction, renovation, or repair as long as there is ongoing work being performed. Once a project is abandoned, there are no longer any construction activities or associated risks that the insurance is intended to cover.

The policy usually has specific provisions that stipulate coverage will lapse or end under certain conditions, including abandonment. This reflects the principle that without the intention or necessity to complete the project, the risks covered by the insurance no longer exist, thus leading to the termination of coverage.

In comparison, the other responses do not align with standard insurance practices. Coverage continuing indefinitely or reducing to half does not address the fundamental aspect that Builders Risk insurance requires ongoing construction. Limitations to the policy upon abandonment do not typically apply because insurance coverage is contingent upon the active nature of the project.