Builders Risk: Who buys it? The builder or the owner who hired the builder?

Builders Risk insurance is an important coverage for those that are building or rehabbing a building.  This coverage does NOT include LIABILITY coverage whatsoever for claims against injury, or accident and it is only designed to insure buildings and dwellings that are under renovation or construction and to protect any building supplies and tools that are in, on, or within 100 feet of the premises.

The big question is this; who buys the insurance, the owner of the building or the builder that the owner hired to renovate or construct?  Well, let me give you a real life example.  A client of mine was having a house built about 10 years ago.  This client hired a builder and the builder purchased builders insurance.  Needless to say my client and his builder started to argue over everything and by the time the 10,000 square foot house was move in ready it burned to the ground.  My client wanted a new builder; however, the old builder was the one with the policy and the 900K claim settlement.  My client had to continue with the builder.  Lesson: if you want the funds to be paid out to you, the owner, then you should buy the builders risk policy and not the builder.