Builders risk vs. general liability insurance

General liability insurance provides protection from common liability claims made by third parties, or people outside your business.

Typically, this policy covers legal defense costs if someone sues over an injury, property damage, copyright infringement, or advertising injury. It can help pay for everything from legal fees to court-ordered judgments and settlements.

Specifically, general liability provides coverage for:

• Bodily injury to third parties
• Damage to third-party property
• Product liability claims
• Personal and advertising injury (e.g., defamation, libel, slander)

Builder's risk insurance is a key policy in the construction industry that provides protection from financial loss due to non-severe weather events for a structure in progress during construction, as well as its materials.

This policy can help pay for repairs and debris removal in the event of a fire, replacing lumber stolen from a worksite, and fixing defective workmanship.

Specifically, builder's risk covers:

• Physical damage to the building under construction
• Temporary structures (like scaffolding)
• Loss or damage to building materials (on-site, in transit, or in storage)
• Vandalism and job-site theft

The difference between general liability insurance and builder's risk insurance is simple.

A general liability insurance policy protects small business owners against claims of property damage, bodily injury, or advertising injury on someone else's property. While builder's risk insurance only covers damages that occur at a construction site.

• General liability insurance covers others (clients, visitors, and vendors)
• Builder's risk insurance covers the policyholder and the property owner

For example, if a jobsite is damaged by theft, vandalism, or weather, the losses would be handled by a builder’s risk policy. However, if someone suffers a bodily injury while visiting the site, it would be covered under a general liability policy.

Both policies are an important part of a contractor's insurance risk management plan. Without them, they can be liable to third parties throughout the course of construction.

Ultimately, whether or not your business is required to have both builder's risk and general liability will depend on several things. This includes if it's new construction or a remodel, project size, cost, and client requirements.

However, carrying both policies is a smart choice to protect both your business, as well as any subcontractors involved in the construction project from all potential exposures. General liability and builder's risk work together to fully protect your business from potentially expensive liability claims.

You should file a claim with your builder's risk coverage when damage occurs directly to the building under construction. While you should file a claim with your general liability insurance when someone else's property is damaged or a third-party is injured due to your project.

When a situation arises where coverage overlaps, filing a claim on your builder's risk policy may help keep your general liability claims history clean with your insurer. This would help keep your insurance premiums low on your general liability insurance.

It's easy to get free quotes for general liability and builder's risk insurance coverage with Insureon. We'll ask for basic facts about your business to help find the right coverage to match your risks, budget, and state requirements.

For most policies, you can get quotes through our online application. If you're not sure what types of insurance policies your business needs, you can speak with a licensed insurance agent. Once you choose your insurance products, you can usually get coverage and your certificate of insurance within 24 hours.