Completed Value Form
A builders risk policy form that insures a project for its anticipated completed value from inception, with premium based on that final figure.
What It Is
The Completed Value Form is one of the two primary rating bases for a builders risk policy, the other being the Reporting Form. Under a Completed Value Form, the policy is written for the full anticipated value of the structure at the date of completion, and a single deposit premium is calculated using a reduced rate that reflects the gradual increase in value during construction.
This form is most appropriate for fixed price, single project construction where the final value is known at policy inception. It avoids the monthly value reporting requirement of the Reporting Form and eliminates the risk of underreporting.
The limit of insurance equals the projected completed value, including the cost of materials, labor, and often soft costs if endorsed. Coverage typically begins at the start of construction and ends at acceptance, occupancy, or a stated expiration, whichever comes first.
Why It Matters for Brokers
Choosing the wrong builders risk form is one of the most common construction insurance E&O claims. A broker who writes a Completed Value Form on a project that grows in scope mid-construction may leave the insured with insufficient limits at the time of a total loss. Conversely, writing a Reporting Form on a fixed price job creates unnecessary administrative burden and exposes the insured to coinsurance penalties for missed monthly reports. Selecting the right form, securing the correct limit, and documenting the basis are essential broker responsibilities.
Real-World Example
A general contractor is building a $6 million medical office. The broker writes a builders risk policy on the Completed Value Form with a $6 million limit and a single deposit premium of $9,400 reflecting the average exposure across the build. Six months in, a fire destroys the partially finished structure causing $3.8 million in damage. Because the policy was written at the full completed value, the carrier pays the loss without applying any coinsurance reduction.
Common Mistakes
- 1Writing the Completed Value Form at the contract price without including soft costs, leaving the insured short on architect fees, permits, and financing costs after a loss.
- 2Failing to extend the policy when construction runs past the original completion date, creating a coverage gap during the most exposed period.
- 3Confusing the Completed Value Form with the Reporting Form, which can leave the insured subject to monthly reporting penalties they did not expect.
- 4Omitting flood, earthquake, or wind endorsements on projects in exposed locations because the base form does not include them.
How brokerageaudit.com Handles This
Submission Intake captures the project value, term, and form selection from builders risk applications and Document Pipeline files the construction contract, schedule of values, and any endorsements. Renewal Manager tracks projected completion dates and alerts producers 60 days before expiration so extensions can be bound without lapse.