Common Mistakes That Increase the Insurance Cost for a Home Building Business
- Nate Jones, CPCU, ARM, CLCS, AU
- 2 hours ago
- 2 min read
For custom home builders, tract developers, condo and multi‑family contractors, controlling the cost for home building business insurance is a constant challenge. Premiums often rise due to fixable gaps in safety, contracts, or documentation. The good news: identifying and correcting these missteps can help you obtain a better home building business insurance quote, without sacrificing coverage.
Below are the most common, preventable mistakes that drive up costs.
1) Weak Subcontractor Risk Transfer
Carriers price your program heavily on how you manage subcontractors. Premiums rise when builders don’t require:
Certificates of Insurance from every sub before work starts
Additional Insured, Primary & Non‑Contributory, and Waiver of Subrogation endorsements
Signed agreements with hold‑harmless/indemnity language
Tightening these requirements reduces loss severity pushed back to your policy and supports better pricing at renewal.
2) Under‑Documented Job-site Safety and QC
Insurers reward a documented safety culture. Prices go up when there’s no paper trail for:
Fall‑protection plans and toolbox talks
Hot‑work permits and fire‑watch procedures
Trenching/excavation plans
Housekeeping, site security, and visitor controls
QC/close‑out inspections (photos, punch lists)
Good documentation reduces GL, WC, and builder’s risk claims, and helps you qualify for preferred programs.
3) Inaccurate Values and Limits
Overstating tool/equipment values inflates premium; understating Builder’s Risk limits creates dangerous gaps. Avoid these pitfalls by:
Setting Builder’s Risk to realistic completed value and term
Updating replacement cost values for tools/equipment annually
Right‑sizing Business Income/soft costs to actual exposure
Accurate scheduling and values = accurate pricing.
4) Insufficient Theft Controls
Tool and material theft is a major driver of builder’s risk and inland marine claims. Common mistakes include poorly lit sites, unlocked gang boxes, untracked tools, and late‑night deliveries of high‑theft items (appliances, copper). Improve security with fencing, lighting, cameras, GPS tagging, and just‑in‑time delivery.
5) Fleet Oversights and Driver Risk
Commercial auto losses quickly raise premiums. Avoid:
Skipping MVR checks and driver screening
Lax no‑phone and backing policies
Inconsistent vehicle maintenance
Telematics/dash cams, ride‑alongs, and documented protocols materially reduce frequency and cost.
6) Missing or Misapplied Coverages
Generalist placements lead to gaps (or unnecessary spend). Builders often overlook:
Builder’s Risk nuances (soft costs, permission to occupy)
Inland Marine for tools/installed materials
Umbrella/Excess requirements on large jobs
E&O for design‑build/value‑engineering
A construction‑savvy agency ensures the right forms and endorsements up front.
Get the Right Price, Without Sacrificing Protection
Not every insurer understands home construction risk, and premiums hinge on subcontractor controls, safety documentation, fleet management, accurate values, and correct coverage structure. Wexford Insurance partners with top‑rated carriers that specialise in home builder business insurance, helping contractors secure the right limits, deductibles, and endorsements, at competitive pricing.
👉 Request your Home Builder Business insurance quote from Wexford Insurance today and ensure your projects, crews, and equipment are fully protected.
