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Builders risk insurance specifically covers physical loss or damage to buildings and structures while they are under construction or undergoing renovation. This type of insurance is designed to protect against risks such as fire, theft, vandalism, and certain weather-related events that could impact the construction site.

By securing this coverage, contractors and property owners can safeguard the financial investment tied to these projects. The insurance typically includes materials and supplies that are essential for the construction process, ensuring that any loss during this critical period is mitigated.

While liability for construction workers might fall under other types of coverage, such as workers' compensation, and costs related to project delays might be addressed through separate policies or contracts, builders risk insurance focuses directly on the physical aspects of the construction site. Similarly, damage to neighboring properties would typically involve general liability insurance rather than builders risk. Therefore, option B is the most accurate representation of what builders risk insurance encompasses.