Why Homebuilders Are Facing a Surge in Lawsuits—and How to Protect Your Business from Liability

Homebuilders across the United States are entering a risky legal landscape—one that’s changing fast.

What used to be a handful of construction defect lawsuits per year in some markets has grown into a full-blown surge. In one region alone, nearly 100 new lawsuits were filed against homebuilders in a single month—more than what some states typically saw in an entire year.

And these aren't small claims. One national builder recently faced a jury verdict in the tens of millions of dollars after hundreds of homeowners from a single neighborhood came forward with complaints.

This isn’t just a blip—it’s a pattern. And if you're a builder, it's no longer a matter of if you’ll be targeted. It’s when.

Jury Bias in Construction Defect Cases Creates High Risk for Homebuilders

When a builder ends up in court, the jury isn’t made up of peers from the industry—it’s made up of homeowners. People who are far more likely to sympathize with the plaintiff than with the builder. That dynamic alone can make a tough situation even worse.

But here’s what most builders don’t realize:

Insurance Gaps and Poor Risk Transfer Are the Real Threat to Builders

You might have a general liability policy in place. But if your subcontractor isn’t insured, or your contracts don’t include proper risk-transfer language, you could still be left holding the bag.

That means you’re potentially responsible for six- or seven-figure payouts—plus legal fees—even if the defect was caused by someone else.

In our work with builders across the country, we’ve seen this scenario play out far too often. The risk doesn’t come from what you see—it comes from what’s hiding in your contracts and coverage.

How Homebuilders Can Reduce Construction Defect Liability and Insurance Exposure

To protect your margins—and your reputation—homebuilders need to take proactive steps:

1. Strengthen Your Subcontractor Agreements with Risk Transfer Language

Make sure your contracts include clear risk-transfer provisions. That means requiring subcontractors to carry adequate insurance and making sure you’re listed as an Additional Insured, with endorsements like Waiver of Subrogation and Primary Non-Contributory.

2. Improve COI Tracking and Subcontractor Insurance Compliance

Collecting certificates of insurance (COIs) isn’t enough. You need a system to track expiration dates, monitor compliance, and audit policies for hidden exclusions. Many builders are shocked to learn that 50% of COIs on file are invalid.

3. Work with a Construction Insurance and Warranty Specialist

Generalist insurance agents often miss critical details. They may not understand the nuances of construction risk, policy exclusions, warranty-related exposure, or subcontractor liability. Partner with an advisor who works exclusively in the building industry—someone who knows the difference between a joist and a jamb and how to spot a coverage gap before it becomes a courtroom problem.

Risk Management for Builders Starts Before the Lawsuit or Arbitration

At Maverick, we specialize in protecting homebuilders from unnecessary risk. From contract review to COI compliance to policy analysis, we help you build a defense before the first claim ever lands on your desk.

You're in a high-risk environment. Don’t walk into it unprotected.

Let’s review your current contracts and insurance program—no cost, no pressure. Just clarity.

Schedule your policy review today.