What is one of the events that causes coverage to cease in a Builders Risk policy?

In a Builders Risk policy, coverage typically ceases when the property is occupied, either in whole or in part. This is based on the principle that Builders Risk insurance is designed to protect the property under construction and the associated risks during the building process. Once the structure is occupied, whether it’s fully completed or only partially completed, the risks shift away from construction to maintenance and operations, which would fall under different types of insurance coverage, such as a commercial property policy.

The reasoning behind this is that once occupancy begins, the dynamics of risk change significantly. The potential hazards associated with construction activities, such as theft of building materials or equipment, or accidents on site, are no longer the primary concerns. Instead, the focus shifts to risks typically covered under a different policy, such as accidents or liabilities occurring in finished spaces.

In terms of the other options, while completion of all phases of construction could signal a transition, it is the act of occupancy that explicitly terminates coverage. Project cancellation would also not inherently cause coverage to cease unless it specifically involved termination of work and subsequently the building is no longer at risk. Transitioning to commercial insurance typically involves acquiring a different type of protection for ongoing operations rather than affecting the Builders Risk policy itself directly.