General Liability vs. Builder’s Risk for Home Builders: Key Differences
- Nate Jones, CPCU, ARM, CLCS, AU
- 25 minutes ago
- 2 min read
When you’re pricing home builder business insurance, two policies appear on every proposal: General Liability (CGL) and Builder’s Risk (course of construction). They sound similar, but they cover very different risks. Understanding the differences helps you buy the right protection and request a more accurate home building business insurance quote.
What General Liability Covers (and Doesn’t)
General Liability protects your company against third‑party bodily injury and property damage arising from your operations. Examples include:
A visitor trips at your job-site and is injured
You accidentally damage a neighbouring property during excavation
A vendor slips in your staging area
CGL responds to liability claims made against you; it does not insure the home you’re building or your materials. It’s the foundation of home builder business insurance and is commonly required by owners, lenders, and GCs (often with Additional Insured, Primary & Non‑Contributory, and Waiver of Subrogation endorsements).
What Builder’s Risk Covers (and Doesn’t)
Builder’s Risk is property insurance for the project under construction. It typically covers:
The structure while being built
Materials on-site, in transit, or at temporary locations (if endorsed)
Certain causes of loss like fire, theft, vandalism, wind/hail (subject to terms)
It is not liability coverage and usually excludes faulty workmanship or design (though it may cover resultant damage depending on form). Limits should match the anticipated completed value and the policy term should reflect the build schedule. Deductibles and special conditions (e.g., theft safeguards, wind/hail deductibles, flood/quake exclusions) affect pricing.
Side‑by‑Side: Key Differences
Risk Type
General Liability: Third‑party injury/property damage claims against you
Builder’s Risk: Property you’re building (first‑party loss)
Common Triggers
General Liability: Premises/operations incidents, completed operations
Builder’s Risk: Fire, theft, vandalism, certain weather events
Who Requires It
General Liability: Owners, landlords, GCs, contracts
Builder’s Risk: Owners/lenders for each job under construction
Limits & Structure
General Liability: Per‑occurrence/aggregate limits; contract endorsements
Builder’s Risk: Project value limit; course‑of‑construction term
How This Affects Your Insurance Cost
CGL premiums hinge on revenue, subcontractor percentage, and claims. Builder’s Risk pricing follows project value, location, term, theft/weather exposure, and site security. Getting both right is essential to an accurate home builder business insurance quote.
Get the Right Coverage Mix for Your Builds
Not every insurer understands the nuances of CGL versus Builder’s Risk, and missing endorsements can stall permits, draws, or access. Wexford Insurance partners with top‑rated carriers that specialise in home builder business insurance, helping contractors set correct limits, deductibles, and endorsements, quickly and accurately.
👉 Request your Home Builder Business insurance quote from Wexford Insurance today and ensure your projects, crews, and equipment are fully protected.
