When constructing a house, value accumulates quickly. Valuable building materials and expensive tools are often stored on-site, making them vulnerable to damage from water leaks, severe weather, theft, and other risks.

By law, all buildings under construction must have fire insurance, which covers the property in case of fire. However, Builder’s Risk Insurance provides additional protection against other common damages that may occur during construction.

During home construction, it’s often not just professionals working on the project—owners, family members, and friends frequently help out.

Builder’s Risk Insurance also covers them for accidents that may occur during the construction process.

It’s best to buy the insurance before any valuable materials are brought to the construction site.

If the owner is building the house themselves, it is crucial to have the policy in place before construction begins, ensuring continuous accident coverage throughout the entire process.

The accident insurance included in Builder’s Risk Insurance follows the collective agreement between the Federation of General and Special Workers in Iceland and employers in the construction industry.

This insurance covers the builder, their family, friends, and acquaintances who help with the construction. It does not cover contractors, skilled tradespeople, or their employees, as they must have their own insurance.

No, it is not enough. By law, owners of buildings under construction must buy fire insurance for their property during the construction phase, just like fully completed houses.

The Housing and Construction Authority (HMS) issues a fire insurance valuation for buildings once they reach construction stage 4. At that point, insurance companies receive official information about the project.

Therefore, homeowners must specifically request fire insurance from their insurance company when construction begins.

It is also important to regularly update the insured value of the fire policy as construction progresses and the property’s value increases.

You can apply for fire insurance by emailing us at sjova@sjova.is, and we will contact you.

Once fire insurance is in place—whether for a building under construction or a completed home—a premium is automatically paid to the Icelandic Catastrophe Insurance, ensuring that the property is also covered for natural disasters.