Which of the following is an excluded peril in a Builders Risk policy?

A Builders Risk policy is designed to provide coverage during the construction of a building, typically covering damage to the structure and materials on-site. However, it has specific exclusions that can vary based on the insurer and the specific policy language.

Flood or any water movement is commonly excluded because these types of perils are often addressed under separate policies or endorsements, such as flood insurance. Flooding can cause significant damage and is seen as a high-risk exposure, prompting insurers to limit their liability in this area. This allows builders and contractors to seek coverage tailored to that specific risk or seek mitigation before starting construction.

While damage from fire, contractor negligence, and theft of materials may also present significant risks in a construction project, they typically are addressed within the provisions of a Builders Risk policy. Fire damage, for instance, is generally covered because it is an anticipated risk in construction sites. Similarly, contractor negligence can be a part of broader liability coverage, depending on how the policy is structured. Theft of materials can also be covered, as it is a common concern at construction sites.

Thus, the correct answer highlights a major exclusion that can significantly impact construction projects, emphasizing the need for builders to consider additional coverage options for such perils.