Do You Need Builders Risk or General Liability Insurance? Learn the key differences between these essential policies and how they protect your construction project.
What Is Builders Risk Insurance?
Builders Risk Insurance is a specialized policy designed to protect the property and materials of a construction project while it’s being built. It typically covers:
- Damage to the structure under construction
- Theft or vandalism of on-site materials
- Weather-related damage (like windstorms or hail)
- Damage to equipment and tools on-site
This policy is temporary and lasts only for the duration of the project. It’s essential for developers, contractors, and property owners involved in construction.
What Is General Liability Insurance?
General Liability Insurance is a broader policy that protects your business from third-party claims. It covers:
- Bodily injury claims (e.g., a pedestrian trips on your job site)
- Property damage claims (e.g., your equipment damages a neighboring property)
- Legal fees and settlements from lawsuits
Unlike Builders Risk, General Liability Insurance doesn’t cover damage to the construction project itself or your materials—it’s designed to protect your business from liability.
Key Differences Between Builders Risk and General Liability Insurance
| Coverage Aspect | Builders Risk Insurance | General Liability Insurance |
|---|---|---|
| Covers Project Property | Yes | No |
| Covers Third-Party Injuries | No | Yes |
| Covers Theft or Vandalism | Yes | No |
| Required by Lenders | Often | Sometimes |
| Protects Against Lawsuits | No | Yes |
Do You Need Both Policies?
In most cases, the answer is yes. Builders Risk and General Liability Insurance complement each other to provide comprehensive protection. For example:
- Builders Risk Insurance: Ensures that your construction project doesn’t suffer financially from unexpected damage or loss.
- General Liability Insurance: Shields your business from lawsuits or claims related to accidents or injuries on the job site.
Without both, you could face significant gaps in coverage that leave your project or business vulnerable.
Final Thoughts
Builders Risk and General Liability Insurance are essential tools for safeguarding your construction project and your business. While they serve different purposes, together they provide a safety net for every stage of your project, from groundbreaking to completion.
Make sure your project is fully protected. Contact us to discuss your insurance needs today.
