Insurance Requirements for Custom, Tract, and Multi‑Family Home Builders
- Nate Jones, CPCU, ARM, CLCS, AU
- 3 hours ago
- 2 min read
Whether you build custom homes, develop tract housing, or deliver multi‑family projects, carrying the right home builder business insurance is both a contract necessity and a risk management must. Lenders, project owners, HOAs, and GCs typically require proof of specific coverages and endorsements before mobilisation. Here’s a practical overview of the core insurance requirements to have in place when requesting a home building business insurance quote.
1) General Liability (CGL), Required on Nearly Every Job
Commercial General Liability is foundational for all home builders. It responds to third‑party bodily injury and property damage arising from your operations (e.g., visitor injury at a site, damage to a neighbouring property). Expect contracts to specify minimum limits (often $1M per occurrence/$2M aggregate) and to require:
Additional Insured
Primary & Non‑Contributory
Waiver of Subrogation
Keep certificates (COIs) current for each project and ensure your subcontractors meet the same standards.
2) Builder’s Risk, Required for Projects Under Construction
Builder’s Risk covers structures while they’re being built, including materials on‑site, in transit, or at temporary storage (as endorsed). Limits should match anticipated completed value (materials + labour) and terms should reflect the build timeline. Expect enhanced requirements on condo and multi‑family projects, and stricter deductibles in high‑theft or severe‑weather regions.
3) Workers’ Compensation, Required When You Have Employees
Home building involves elevated injury exposure (falls, lifting, hot work, power tools). Workers’ Compensation is mandatory in most states for employees and covers medical bills and lost wages. Use accurate class codes (carpentry, roofing, concrete) and payroll splits to avoid audit surprises and control cost.
4) Commercial Auto, Required for Fleet and Job Transport
If you run trucks or vans, Commercial Auto is required. Underwriters evaluate driver MVRs, garaging, radius, telematics, and maintenance. If employees or subs use personal vehicles for business errands, add Hired & Non‑Owned Auto.
5) Umbrella/Excess Liability, Often Required by Owners/Lenders
Large tract developments and multi‑family or condo builds frequently require an Umbrella/Excess policy to increase total limits over CGL, Auto, and Employers’ Liability. Review contract minimums and ensure your underlying policies meet attachment requirements.
6) Inland Marine (Contractors’ Tools & Equipment)
Covers mobile equipment and tools, lifts, compressors, lasers, power tools, while in transit, on‑site, or in storage. Many owners and lenders expect evidence that high‑value equipment and materials are insured.
7) Professional Liability (E&O) and Contractor’s Pollution Liability (CPL)
If you provide design‑build, value‑engineering, or consultative services, E&O is recommended (and sometimes required). For projects involving excavation, remediation, or environmental exposures, CPL may be mandatory.
Get the Right Requirements in Place, Fast
Every project type has its own insurance demands, custom, tract, multi‑family/condo, and missing an endorsement can delay permits, draws, or access. Wexford Insurance partners with top‑rated carriers that specialise in home builder business insurance, helping contractors secure correct limits, deductibles, endorsements, and COIs, quickly and accurately.
👉 Request your Home Builder Business insurance quote from Wexford Insurance today and ensure your projects, crews, and equipment are fully protected.
