Builder's Risk for Los Angeles — Earthquake, Wildfire & Retrofit Coverage
LA's seismic fault systems, wildfire-urban interface zones, and mandatory soft-story retrofit program create builder's risk exposures that standard policies don't cover. We deliver construction insurance built for the realities of building in Los Angeles.
LA Construction Risk Landscape
Los Angeles combines seismic, wildfire, flood, and mudslide exposures that make builder's risk more complex — and more critical — than almost any other U.S. market.
Earthquake & Seismic Risk
Los Angeles sits on multiple active fault systems — the San Andreas, Newport-Inglewood, Santa Monica, and Hollywood faults create seismic exposure that standard builder's risk policies exclude. Earth movement endorsements are essential for any LA construction project, adding 15-40% to base premiums. The 1994 Northridge earthquake caused $20B+ in damage, with construction-in-progress losses often uninsured. Soft-story retrofit projects face unique seismic-during-construction exposure.
Wildfire & Brush Fire Exposure
LA County's wildfire-urban interface (WUI) zones — from Pacific Palisades to the San Gabriel foothills — create extreme builder's risk challenges. Projects in Very High Fire Hazard Severity Zones face limited carrier availability, brush clearance requirements, and premiums 3-5x standard rates. The 2025 Palisades fire demonstrated that even established neighborhoods face catastrophic wildfire risk during construction when fire suppression systems aren't yet operational.
Soft-Story & Seismic Retrofit Projects
LA's mandatory soft-story retrofit program covers 13,500+ buildings. Builder's risk for retrofit projects is more complex than new construction — the existing structure's value must be considered alongside improvement costs. Occupied building retrofits add tenant displacement exposure, temporary shoring risks, and the liability of modifying structural elements in buildings that must remain habitable during construction phases.
Flood, Mudslide & Debris Flow
Post-fire debris flow risk in hillside areas (Mandeville Canyon, Topanga, Altadena) creates flood and mudslide exposure that standard builder's risk excludes. FEMA flood zone projects along the LA River corridor and coastal construction in Santa Monica and Venice require separate flood endorsements. LA County's post-fire building moratorium areas present unique timing and coverage challenges for reconstruction projects.
What LA Builder's Risk Covers
Builder's risk protects your construction project from physical loss during the build — but in Los Angeles, the endorsements matter as much as the base policy.
- Structure under construction — full replacement cost coverage for the building during all construction phases
- Materials and supplies — coverage for building materials on-site, in transit, and at temporary storage locations
- Earthquake/earth movement endorsement — essential for all LA construction, covering seismic damage during the build
- Equipment and temporary structures — scaffolding, formwork, temporary power, and construction equipment on-site
- Soft costs — architect fees, permits, loan interest, and other expenses if construction is delayed by a covered loss
- Debris removal — clean-up and disposal costs after fire, earthquake, or storm damage on the construction site
- Ordinance and law coverage — increased costs when rebuilding must comply with updated building codes after a loss
- Theft and vandalism — protection against job site theft (LA averages $4.2M in annual construction site theft losses)
Real-World Claim Scenario
Hollywood Hills Custom Residence
A custom home builder constructing a $6.8M residence in the Hollywood Hills experienced a 4.7 magnitude earthquake centered on the Hollywood Fault during the framing phase. The seismic event shifted the hillside foundation, cracked retaining walls, and displaced steel moment frames that had just been welded into position.
Without the earthquake endorsement, the entire $1.2M in damage would have been uninsured — the standard builder's risk policy excluded all earth movement. The endorsement, which cost $38,000 for the 14-month construction period, covered the full repair cost plus 4 months of delay-related soft costs.
Total Cost: $1,200,000+
- • Foundation and retaining wall repair: $485,000 (covered)
- • Steel moment frame realignment and rewelding: $290,000 (covered)
- • Structural engineering re-analysis: $85,000 (covered — soft costs)
- • Extended general conditions (4 months): $220,000 (covered — soft costs)
- • Debris removal and site stabilization: $120,000 (covered)
The earthquake endorsement — costing $38,000 — covered $1.2M in seismic damage and delay costs. Without it, the builder faced personal liability that would have bankrupted the business.
Builder's Risk Resource Library
In-depth guides on builder's risk for Los Angeles construction — from earthquake endorsements to wildfire zone coverage and soft-story retrofit insurance.
Los Angeles Builder's Risk FAQ
Does standard builder's risk cover earthquake damage in Los Angeles?
No. Standard builder's risk policies exclude earth movement, including earthquake, landslide, and subsidence. An earthquake endorsement must be added separately and typically costs 15-40% above the base premium depending on the project's proximity to fault lines, soil type, structural design, and construction method. Given LA's seismic risk, we consider earthquake coverage essential for every construction project in the metro area.
How much does builder's risk insurance cost for LA construction projects?
Base builder's risk premiums in Los Angeles typically run 1-3% of the total project value for standard construction. Earthquake endorsements add 15-40%. Wildfire zone projects in the WUI add 200-400% to base rates. A $5M residential project in a standard LA location might cost $50,000-$85,000 including earthquake coverage. A similar project in a VHFHSZ zone could exceed $200,000. We shop 50+ carriers to find the most competitive rates.
What builder's risk coverage do I need for a soft-story retrofit?
Soft-story retrofit builder's risk requires coverage for the existing structure value (not just improvement costs), the retrofit construction value, earthquake during construction, tenant displacement and loss of rents if the building is occupied, temporary shoring failure, and the completed retrofit's performance. The policy should be written on a completed value form with a project period matching the full retrofit timeline including inspection delays.
Can I get builder's risk insurance in LA wildfire zones?
Yes, though options are limited in Very High Fire Hazard Severity Zones (VHFHSZ). Standard carriers may decline, but surplus lines markets and specialty construction insurers will underwrite wildfire zone projects with adequate brush clearance, fire-resistant construction methods, and sometimes fire watch requirements during Red Flag warnings. We access specialty markets specifically for LA hillside and WUI zone construction.
Does builder's risk cover construction delays from a covered loss?
Soft cost coverage — an optional endorsement — covers financial losses from construction delays caused by covered perils. This includes extended loan interest, additional architect and engineering fees, extended general conditions, permit renewal costs, and marketing expenses for delayed openings. In LA's high-cost market, soft cost coverage is particularly important — a 6-month delay on a $10M project can add $500,000+ in carrying costs.
Protect Your LA Construction Project with Builder's Risk Coverage
Earthquake endorsements, wildfire zone coverage, and soft-story retrofit insurance — built for the realities of construction in Los Angeles.