North Carolina Adjuster Practice Exam

Which insurance covers direct physical damage to a construction site?

1. Commercial General Liability Insurance

2. Builder's Risk Insurance

3. Property Damage Insurance

4. Workers' Compensation Insurance

The correct answer is: Builder's Risk Insurance

Builder's Risk Insurance is specifically designed to cover direct physical damage to a construction site. This type of insurance is typically purchased by contractors or property owners when a building or construction project is underway. It protects the structure during its construction phase from various risks such as fire, vandalism, theft, and certain weather events that could cause physical damage. The other types of insurance listed do not specifically target direct physical damage to the construction site. Commercial General Liability Insurance primarily covers third-party liability claims for bodily injury or property damage occurring on the premises, rather than damage to the construction project itself. Property Damage Insurance is a broader category that includes various forms of coverage but may not specifically focus on construction sites. Workers' Compensation Insurance is designed to cover medical expenses and lost wages for employees who are injured on the job, rather than covering physical damage to the site itself. Therefore, Builder's Risk Insurance is the appropriate choice for safeguarding against direct physical damage occurring during the construction process.