Builder's risk vs. general liability insurance: Side-by-side

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MALE VOICEOVER: In the construction industry, small business owners often face unique risks as projects don't always run smoothly. There are two types of insurance coverage that construction businesses should have to protect themselves from unexpected claims and lawsuits. General liability insurance, and builder's risk insurance.

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While both policies offer protection for your small business, they cover different types of risks. So what's the difference between general liability insurance and builder's risk coverage?

General liability insurance protects against common third-party claims or lawsuits from people outside your business, such as customer injuries, damage to client property, advertising injuries, and product liability claims.

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On the other hand, builder's risk coverage, also called course of construction insurance, offers protection from financial loss due to non-severe weather events for a building or work site that's under construction.

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This includes physical damage to the building, and temporary structures, like scaffolding, loss or damage of building materials, and vandalism.

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So, who is covered by each policy? General liability insurance covers third-party individuals, such as clients, visitors, and vendors.

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While builder's risk insurance covers the policy holder and the property owner.

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Does your business need both builder's risk and general liability insurance? That depends on several factors, such as if the project you're working on is new construction or a remodel, the project size and cost, client requirements, and your state licensing requirements.

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For example, in some states, general contractors are required to carry general liability in order to get their business license.

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However, carrying both policies is a smart choice to fully protect your business from potentially expensive claims. It's best to speak with your insurance agent to understand which policies can meet both your business needs and your budget.

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Get free insurance quotes for your small business with Insureon today.

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Click the link to get started.

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