How to Add HVAC Equipment to a Builders Risk Policy During Installation

Adding HVAC equipment to a builders risk policy during installation is a critical step for HVAC contractors, general contractors (GCs), and project owners to avoid gaps in coverage and expensive out-of-pocket losses. This guide explains the when, how, and what to do—focused on U.S. projects (examples: Los Angeles, CA; Houston, TX; Chicago, IL)—and gives concrete pricing examples, carrier notes, and documentation best practices.

Why you must add HVAC equipment to builders risk during installation

• Builders risk policies cover the structure and materials during construction, but coverage is only effective for property listed on the policy. Unscheduled or unreported HVAC equipment can be excluded.
• Installation periods are high-risk: theft, transit damage, installation error, fire, wind/hail, and vandalism are common.
• For subcontractors, failure to ensure HVAC equipment is on the owners’/GC’s builders risk or on a Contractors' Equipment (inland marine) policy can result in coverage disputes and payment delays.

Authoritative resources:

• Insurance Information Institute — What is builders risk insurance? (overview of scope and common exclusions): https://www.iii.org/article/what-is-builders-risk-insurance
• The Hartford — Builders risk coverage details and typical approaches: https://www.thehartford.com/business-insurance/coverage/property/builders-risk-insurance
• Insureon — Typical builders risk costs and examples: https://www.insureon.com/blog/how-much-builders-risk-insurance-costs

When to add HVAC equipment: timing and triggers

Add HVAC equipment to builders risk before any of these occur:

• Equipment arrives on-site (or is shipped to site)
• Equipment is installed or partially installed
• Equipment is used to make the building temporarily operational (e.g., temp heating/cooling)
• Equipment is moved from one site to another (seek site-to-site coverage)

If the GC or owner already has builders risk, they typically add subcontractors’ materials via an endorsement, schedule, or blanket limit. If not, HVAC contractors must ensure their own inland marine/contractors' equipment policy covers the items.

Step-by-step: How to add HVAC equipment to builders risk

1. Notify the insured party and carrier early
   • GC/owner should notify their builders risk insurer that HVAC equipment will be delivered and installed, with estimated values and dates.
2. Provide a detailed equipment schedule
   • Include make/model, serial numbers, VINs (if applicable), invoice/ACV/RRC values, and delivery/installation dates.
3. Decide valuation method
   • Replacement cost vs. actual cash value. Replacement cost is usually preferable for expensive HVAC systems.
4. Choose coverage form and endorsements
   • Common additions: scheduled equipment endorsement, off-site coverage, transit coverage, soft costs extension (for delay in completion), debris removal.
5. Confirm deductibles, perils, and exclusions
   • Clarify theft exclusions, mechanical breakdown coverage, and whether testing/commissioning is covered.
6. Obtain a certificate or endorsement
   • Get written evidence that equipment is included with stated limits and effective dates.
7. Coordinate with subcontractor and GC policies
   • Ensure no coverage gaps—see coordination tips below.

What to include in the schedule (minimum)

• Item description, serial/model numbers
• Owner of the equipment (owner/GC/subcontractor)
• Insured value and valuation basis (RCC/ACV)
• Location(s) (on-site, off-site storage, in transit)
• Installation/commissioning timeline
• Requested effective date and policy/project number

Example costs and valuation (U.S. market examples)

Builders risk premiums vary by project size, location, construction type, and policy terms. Typical industry ranges:

• Builders risk premium: generally about 0.5%–3% of the total completed value per year, commonly quoted as 1%–2% for many commercial projects. (Sources: Insurance Information Institute, The Hartford, Insureon)
  • Example: Los Angeles commercial retrofit, project value $500,000, rate 1.25% for a 6-month period → premium ≈ $6,250 (annualized basis; pro-rated for term).
  • Source: https://www.iii.org/article/what-is-builders-risk-insurance and https://www.thehartford.com/business-insurance/coverage/property/builders-risk-insurance
• Contractors' equipment / inland marine: premiums commonly 1%–3% of equipment value annually, or flat market rates for smaller contractors.
  • Example: HVAC equipment valued at $150,000: at 2% annual rate → premium ≈ $3,000/year. If covered on the builders risk pro-rated basis for 6 months at 1.25% of project value, incremental cost may be ~$1,875 for that equipment allocation.
  • Source: https://www.insureon.com/blog/how-much-builders-risk-insurance-costs

Note: Rates vary by carrier and location. High-theft regions or hurricane-exposed areas like Houston may push rates up; interior cities with lower weather risk may see lower rates.

Carrier options & market notes (U.S. carriers)

• The Hartford — active in builders risk and inland marine for subcontractors and offers flexible endorsements (see Hartford builders risk page above).
• Travelers and Chubb — known to underwrite larger commercial builders risk programs, including scheduled equipment endorsements.
• Regional carriers and wholesale brokers — often necessary for complex HVAC schedules or high-theft urban jobs.

Many carriers require a written schedule and may charge an additional flat endorsement fee plus pro-rated premium. For luxury or mission-critical systems, carriers such as Chubb or Zurich can provide higher limits and broad wording—but at higher cost.

Coordination between parties (best practices)

• Request a written builders risk endorsement naming the subcontractor as a “named insured” or “additional insured” for subcontractor materials where practical.
• Use a Certificate of Insurance that references the builders risk policy number and confirms the HVAC schedule is included.
• Maintain a copy of invoices, delivery receipts, installation reports, and commissioning forms to support any claim.
• See related guidance: Coordinating Coverage Between GC, Subcontractor and Owner Policies for HVAC Work.

Table: Quick comparison — Builders Risk vs Contractors' Equipment for HVAC items

Practical on-site controls and documentation (reduce premiums and claims friction)

• Tag equipment with unique IDs and record serial numbers.
• Photograph deliveries and storage locations.
• Use secured storage (fenced, locked, alarmed containers) — insurers often reduce exclusions if secured.
• Limit on-site storage time; use bonded storage yards with inventory.
• Keep shipping invoices, bills of lading, and testing/commissioning logs.

Common endorsements to request for HVAC work

• Scheduled equipment endorsement (lists high-value items)
• Transit and off-site storage coverage
• Testing and commissioning coverage (important for equipment damage during startup)
• Soft costs/delay in completion (if HVAC failure delays project opening)
• Debris removal (post-loss cleanup)

See related best practices for storing and insuring components during projects: Best Practices for Storing and Insuring HVAC Components During Long-Term Projects.

Frequently asked questions

• Q: Who typically adds HVAC to builders risk—the GC or the subcontractor?
  • A: Usually the GC or owner adds materials and installed property; subcontractors should verify coverage and, if necessary, keep their own inland marine policy for contractor-owned equipment.
• Q: Are shipments from vendor to jobsite covered automatically?
  • A: Not always—confirm transit coverage or request a specific endorsement.
• Q: What about mechanical breakdown during commissioning?
  • A: Many builders risk forms exclude mechanical/electrical breakdown; ask for testing & commissioning coverage or rely on manufacturer's warranties and separate equipment breakdown coverage.

Final checklist before equipment shipment/installation

• Confirm builders risk policy will include a scheduled HVAC list or blanket limit.
• Provide serial numbers, values, and delivery/installation timeline to carrier.
• Agree on valuation method (replacement cost recommended).
• Secure written endorsement or certificate naming parties and limits.
• Maintain on-site security, photos, and receipts.

Relevant additional reading from this cluster:

• Builders Risk vs Contractors' Equipment: Which Insurance Protects HVAC Materials on a Jobsite?
• Insuring HVAC Materials During Renovation: Builders Risk Policy Essentials
• Coordinating Coverage Between GC, Subcontractor and Owner Policies for HVAC Work

For carrier-specific product terms and precise premium quotes for your project in Los Angeles, Houston, Chicago or elsewhere, contact your broker or carriers such as The Hartford, Travelers, Chubb, or regional underwriters to obtain a tailored schedule endorsement and exact pro-rated premium. External sources referenced above for rates and scope: Insurance Information Institute, The Hartford, and Insureon (links in article).