Builders Risk vs. General Liability, What’s the Difference?

A construction site can be a risky place to work, especially since construction projects don’t always run smoothly. General liability insurance and builders risk insurance are two types of coverages that every small business owner in the construction industry should have. Some people think that they’re interchangeable. However, while both types of liability coverage will protect your small business and are equally important, they actually cover different risks. Let’s explore the key features of builders risk vs. general liability.

Builders Risk Insurance

Builders risk insurance protects the buildings and structures that are still under construction or renovation. Builders risk coverage also protects the building materials and equipment used in construction projects. Extended coverage can include protection for scaffolding on the job site, the cost to remove debris and to fix defective workmanship. The property value and cost of construction site equipment can be difficult to recover in the event of a loss. That’s why this type of property insurance is important for business owners, general contractors and subcontractors to have.

What Does Builders Risk Insurance Cover?

Builders risk insurance covers the loss or damage of various business materials associated with a construction site, including:

Wiring
Machinery
Fixtures
Temporary structures
Cribbing
Modular components
Valuable papers and data
Testing

Most builders risk policies cover damages only to the property owned by the policyholder. Builders risk insurance from The Hartford also covers property damage owned by others while it is located at our insured’s construction site.

What’s Not Covered by Builders Risk Insurance?

Builders risk insurance does not protect the employees on a construction site. It also doesn’t cover damages from natural disasters or problems outside of the business owner’s control, such as:

Collapses
Government activities
War
Flooding
Earthquakes
Hurricanes

Contractors General Liability

Contractors general liability insurance protects small business owners against claims of property damage, bodily injury or advertising injury on someone else’s property. In comparison, builders risk insurance only covers damages that occur at your business-owned construction site.

What Does Contractors General Liability Cover?

A contractors general liability policy will extend coverage to anywhere your construction project takes you. So, whether you’re renovating a kitchen at a client’s home or installing windows in a new storefront, contractors general liability insurance covers an incident or damage that could result in costly liability claims for your construction business.

What’s Not Covered by Contractors General Liability?

Small business owners should be aware that contractors general liability insurance does not cover bodily injury to employees or damage to a contractor’s own property or tools.

Builders Risk vs. General Liability, Which One Is Right for You?

Keep in mind that builders risk insurance only protects the job site and building materials. Your coverage ends when the project is done. General liability insurance protects the individual contractors and the policy is active year-round. These two types of coverages work together to fully protect your construction business from expensive liability claims.

Coverage for the Job Site and Beyond

You’ve worked hard to build your small business, so help protect it with liability coverage that goes beyond the job site. Talk to a trusted insurance agent about these additional insurance products:

Cyber Insurance

Cyber insurance, or data breach insurance, helps small business owners respond to a breach if personally identifiable information gets lost or stolen.

Contractors Pollution Liability

Contractors pollution liability insurance helps protect your business if a pollution incident happens at a third-party job site. You buy this coverage separately from a general liability policy. It covers small business owners from liability claims of:

Environmental damage
Property damage
Bodily injury
Clean-up costs

Workers’ Compensation

Workers’ compensation insurance covers your employees if they suffer a work-related injury or illness. This liability coverage gives them benefits that can help them return to work faster and may cover:

The cost of medical care and treatment
Lost wages
Disability
Funeral costs in the event of an employee’s death from a work-related injury or illness

Workers’ comp also protects small business owners by helping to pay for your defense costs if you’re faced with an employee lawsuit. Many states require business owners to carry workers’ comp liability coverage.

Construction Surety Bonds

Construction surety bonds are used to guarantee contractors’ business obligations. They’re specifically underwritten to meet the needs of:

General contractors
Highway/heavy contractors
Trade contractors
Specialty contractors

Get the Right Liability Coverage for Your Business

We’re an insurance company backed by more than 200 years of experience and we’ve helped more than 1 million small business owners just like you. Whether you want to find a local insurance agent to discuss builders risk coverage or need a general liability insurance quote, our specialists will help you get the right protection for your construction business.

Last Updated: August 24, 2022