Builder’s Risk vs. General Liability: What Does Each One Protect?
A home under construction and the business building it face different risks.
That is why Builder’s Risk and General Liability serve two different purposes.
Builder’s Risk helps protect the project. General Liability helps protect the business.
Home builders often need both coverages working together to avoid leaving part of the construction process unprotected.
Builder’s Risk Protects the Project
Builder’s Risk insurance is designed to protect a home while it is under construction.
Depending on the policy, it may help cover the structure, building materials, and supplies if they are damaged by a covered event such as:
• Fire
• Theft
• Vandalism
• Wind
• Hail
• Lightning
For example, if materials are stolen from a covered jobsite or a storm damages a home during construction, Builder’s Risk may help cover the cost to repair or replace what was damaged.
Builder’s Risk typically applies to a specific project for a defined coverage period. Once the home is completed or sold, that coverage ends according to the policy terms.
General Liability Protects the Business
General Liability insurance is designed to protect the builder’s business from certain claims involving third party bodily injury or property damage.
For example, General Liability may respond if:
• A visitor is injured at the jobsite
• Construction work accidentally damages a neighboring property
• The builder is held responsible for covered damage caused by business operations
General Liability supports the business across its operations, while Builder’s Risk focuses on the physical home being built.
Why One Policy Cannot Replace the Other
Builder’s Risk and General Liability are not interchangeable.
If a fire damages a home under construction, General Liability may not cover the builder’s own project. That is where Builder’s Risk comes in.
If someone is injured at the jobsite, Builder’s Risk is not designed to address the resulting liability claim. That is where General Liability may apply.
One protects the project. The other protects the business behind it.
Make Sure Your Coverage Works Together
Having both policies is only part of the picture. The coverage should also reflect how your company operates, the homes you build, and the subcontractors you work with.
Builders should review:
• When each policy begins and ends
• Which projects and operations are covered
• Coverage limits and deductibles
• Subcontractor insurance requirements
• Exclusions that may affect residential construction
When Builder’s Risk and General Liability are aligned, builders can manage their coverage more clearly from the start of construction through completion.
One Partner for Both
Maverick offers Builder’s Risk and General Liability insurance designed specifically for home builders.
Our team can review your current coverage, explain how the policies work together, and help identify areas that may need attention.
Contact your Maverick representative to schedule a coverage review.