Do You Need Both Builders Risk Insuranceand Liability Insurance?
If you own a construction business, whether a small business or large, you have many insurance policiesthat you need to keep your business protected, many business ownerswonder if they need all those insurance policiesor if they could cut out one or two to save money. In a general contractor’s live, they might see general liability insurance, builders risk insurance, property insurance, and workers compensation, among others.
While each of these has a use, the most often question we get is, “What about builders risk and general liability? Do we need both?” They think that having both on one construction siteseems redundant since they both cover the property damagethat was done by a subcontractor. However, as with many things in construction, it’s not that simple.
Builders Risk Insurance Policies
Throughout construction, your job sitecould suffer structural damage, damage to the equipment, or even damage to the materials any day. These risks could be fire, weather, or even vandalization. Builders Risk insurance coverage, as we’ve mentioned in the past, is a type of insurance policya general contractorwould have covering the construction projectfor this very reason. While each plan is unique, most builders risk policiesonly include external events. Things not covered will be employee theft, bodily damage, soft costs, advertising injury, or similar. General liability insurance coveragedoes cover those issues, however.
What is Liability Insurance?
When an insurance company writes out construction insurancein the form of general liability insurance, they’re intended to keep the general contractorsafe and in business should something happen. In many states, it’s required by law so that the general contracting business owneris protected should a subcontractor do something wrong on site. As you may know, the general liabilityis mostly around for safeguarding the general contractorfrom property damage, bodily injury, slander. As such, you can often get assistance with legal fees when going to court should the need arise.
What’s the Difference?
Both builders risk coverageand general liabilitycan cover property damagedone by a subcontractor on a new constructionor renovation. However, the significant difference when it comes to general liabilityis that it is often required by law and focused on covering the general contractor. Builders risk coverageis, on the other hand, more interested in covering the job siteso that all parties with an insurable interestin the site will be protected.
What is Needed?
You shouldn’t expect to be an expert in insurance as a business owner(unless you sell insurance.) However, getting ahold of an insurance agent is easy. An insurance agent will be able to walk your through the policies you need, should have, or could have. Also, they can tell you what risk managementprocedures could help your quote and what you should expect to be covered depending on what you pay. An insurance company will ensure that you get the best deal and the right coverage!