Contractor insurance

General contractor and home builder insurance

General contractors and home builders carry risk for work they did not physically perform. A large part of the insurance conversation is about how that risk moves between you, the people you hire and the owner.

What the work usually involves

No two builders run a job the same way, and the split between what you self-perform and what you hire out changes the conversation more than almost anything else.

  • Coordinating trades, inspections and schedules across a project
  • New residential construction, additions and garages
  • Remodels and finish work inside occupied homes
  • Site preparation, framing and shell work
  • Hiring, scheduling and paying subcontractors
  • Ordering, receiving and storing materials on site

Risks worth talking through

Work performed on your behalf

Using subcontractors does not eliminate your business's potential liability. Written contracts and insurance requirements for subcontractors should be reviewed carefully.

Certificates of insurance that quietly lapse

A subcontractor who was insured when they bid may not be insured when they frame. Tracking certificates, expiration dates and additional insured status is one of the few risk controls a builder fully controls.

Claims that arrive long after the keys do

Water intrusion, settlement and envelope problems on finished homes often surface years later. How a policy treats completed work, and whether coverage was continuous across those years, can matter as much as the limit on any single policy.

The structure while it is still going up

A general liability policy is generally not intended to pay for fire, wind or theft damage to the building you are in the middle of constructing. That is a separate conversation.

What the contract obligates you to do

Indemnity language, hold harmless clauses and additional insured requirements can commit you to more than your policy was written to handle. It is worth reading these before signing, not after a loss.

Remodels in homes people are living in

Customer belongings, finished surfaces and pets are all in the work area. Damage to property in your care is often treated differently from damage to a third party's property, and the distinction depends on the wording that applies.

Coverage areas to review

General liability

General liability is usually the base of the program. It may help address claims alleging bodily injury or damage to someone else's property arising from your operations. For builders, the rating is often driven by receipts and by how much work is subcontracted. Carriers commonly ask for subcontractor certificates at audit, and cost paid to uninsured subcontractors may be charged back to you at a higher rate.

Workers compensation

If you have employees, workers compensation is handled separately from your liability policy and carries its own statutory considerations, which are worth going through for your particular setup rather than assuming. Payroll is usually split between office and field classifications, and how owners and officers are treated varies. Subcontractors who cannot show their own coverage are frequently picked up as employees at audit, which is one of the most common sources of an unexpected audit bill.

Commercial auto

Pickups, dump trailers and material trailers are the usual starting point. Two things get missed often: employees running errands or driving to jobsites in their own vehicles, and trailers that were added mid-season and never reported.

Tools, equipment and the building under construction

Portable tools, compressors and generators, materials in transit, and materials stored at a jobsite before they are installed are usually addressed separately from your liability policy. Coverage for the structure itself while under construction is its own product and is often required by a construction lender.

This page is general information, not legal, safety or coverage advice. What a policy actually covers depends on your business operations and on the policy, carrier, terms, conditions, limits and exclusions that apply. Nothing here confirms eligibility or guarantees that any coverage is available to you.

What to have ready for a review

  • A plain description of what you self-perform and what you hire out
  • Annual receipts, and payroll split between office and field
  • Roughly what share of work is new construction versus remodel
  • Residential versus commercial mix
  • A list of vehicles and trailers
  • How you collect and track subcontractor certificates
  • Any claims or incidents from the last several years

Questions we hear

If I subcontract nearly everything, do I still need liability coverage?

Subcontracting does not eliminate your liability exposure. A general contractor can still be named in a claim even when subcontractors performed the work.

Why does my carrier ask for subcontractor certificates at audit?

Typically because the premium was calculated on the assumption that your subcontractors carried their own coverage. If you cannot produce a certificate, the amount you paid that subcontractor is commonly reclassified and charged at a higher rate. Collecting certificates before work starts is far easier than reconstructing them a year later.

Is builders risk the same thing as general liability?

No. General liability is generally concerned with injury or damage you cause to someone else. Builders risk is property coverage for the structure you are building while it is under construction. They answer different questions, and a lender will often require the second one specifically.

Ready to talk it over?

Call or text the office, or send a request and we will get back to you.

Call 320-275-3001 Text 320-275-3001 Get a Quote

Dassel State Insurance Agency is based in Dassel and works with contractors throughout Minnesota.

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