What kind of structures are covered:

In general, construction insurance policies are written to cover buildings or structures on the property during the course of construction, including all additions directly attached to the structure and fixtures, equipment and machinery that could be considered part of the building (such as boilers, HVAC systems, or Electrical systems). Normally, temporary structures are also covered, and so are on-site materials and suppliers that are used in the construction. Some policies can be extended to include materials that are in transit to the property for extra cost.

What kinds of structures are not covered:

Generally, a builders risk policy does not cover fences, signs, walkways, roadways, or swimming pools. In building near water, wharfs, docks, dams, tunnels, bridges, and underpasses are usually not covered. Landscaping is also excluded in normal circumstances, so damage to lawns, trees, and plants are not covered. Additionally, underground structures are generally excluded, such as foundations, pipes, drains, and the costs of excavation, grading or filling.

What types of risks are usually excluded:

The policy will usually contain exclusions of coverage for damage caused by faulty designs or workmanship because these types of defects can usually be covered by insurance available to architects or engineers. However, if the design defect led to a fire, and fire was covered, then the fire damage could be covered.
The policy also will usually exclude certain types of catastrophic events like earthquakes, volcanoes, landslides, floods, and tidal waves (tsunamis). Water damage is usually excluded where the water comes from below the surface, leaking pipes, and seepage through foundations.