General Liability is a core component of responsible risk management for homebuilders working on a full-scale project. This vital coverage equips contracting companies to contend with many of the most common claims they will likely encounter. Your job as a retail or wholesale broker is to prepare to discuss the practical utility of general liability coverage with your clients in this field and cite examples of the types of claims it can address. In the following article, we examine some of the most common claims covered by general liability insurance for homebuilders to equip you with the knowledge needed to guide clients toward proper coverage.
Key Coverage Areas
General Liability insurance plays a crucial role in protecting homebuilders from unexpected risks and potential liabilities. Mishaps, accidents, property damage, or even legal disputes can arise, posing financial and legal threats to their businesses. Convey the importance of having adequate insurance coverage for the key coverage areas outlined below, and you’ll be able to provide them with peace of mind as you help them navigate construction industry insurance.
General Liability and Bodily Injury
Homebuilders could be liable if a customer or a third party were to sustain an injury on a job site, regardless of whether a contractor was directly responsible for creating a hazardous condition.
General Liability for homebuilders provides them with the resources needed to respond to bodily injury claims. This coverage may extend to claims from either a client or a third party, such as a subcontractor or a pedestrian.
The proceeds from a policy may pay for an individual’s medical treatment, and this compensation may include the value of payments that a healthcare insurance company has already paid to treatment providers. In addition, a policy could pay for a settlement or a court-ordered award for damages. Alternatively, if a claim against a homebuilder lacks merit or the builder has a robust legal defense, an insurer may cover legal expenses to defend the claim in court.
Property Damage
Many common homebuilder claims precipitate from costly property damage. An unintentional act or omission that damages a building before the completion of construction might entail expensive setbacks and repairs for property owners. A general liability policy could compensate them for these financial hardships.
Liability coverage can address claims from a third party who incurs damage on a job site. For instance, if a falling object strikes the vehicle of an engineer or a material supplier, this event is likely to fall under the scope of general liability coverage.
General Liability Claims After Work Is Complete
When homebuilders are through working on a project, it does not prevent them from facing lawsuits. A problem with workmanship, such as structural instability due to improper materials or water damage due to defects in a roofing system, might subject a homebuilder to a costly claim.
Remember that coverage for this category of claims tends to vary depending on a general liability policy’s individual terms and exclusions. Be sure to highlight the advantages of a policy with coverage for completed operations.
Lastly, remember that it may be prudent for some of your clients to augment their insurance coverages. Your guidance can help your clients identify coverage options that address gaps in their primary policy elections and meaningfully mitigate their most significant risk exposures.
About Commodore Insurance Services
Commodore Insurance Services, Inc. (Commodore) is a California corporation that operates as a Managing General Agency and Program Manager. Since incorporating in 1990, Commodore has developed an expertise in the production and underwriting of insurance products for businesses across the West Coast. Our focus is on providing top-level insurance products to our clients while striving to make it easy to do business for our brokers. Try us and find out why we have continued to be successful for more than 27 years and are recognized as the trusted leader in small business insurance.
