3 Key Insurance Coverages for Home Builders

For homebuilders, the housing sector, while still lagging behind in numbers since before the housing crisis in the previous decade, is set up for major growth in the 2020s. In fact, new housing has become such a growing need that states around the country are already calling on home builders and contractors to help with supplying the country’s rising population with new houses.

But while having plenty of work is a good problem to have, it also brings with it the opportunity for a refresher around attaining the right coverage to protect a homebuilding company. Having home builders insurance isn’t an option, and coverage costs can be high, so it’s important to understand what kind of coverage is needed in order to operate efficiently and safely in the industry.

Here’s a quick look at some of the most common types of home builders insurance that contractors and other builders in the industry can invest in when working in residential construction.

1. General Liability Insurance

General liability insurance policies are the most common types of insurance programs that those in the home building industry invest in. This is a broad policy, as the name suggests, that covers everything from bodily injury to property damage on job sites. A general liability policy isn’t a one-size-fits-all program, however, as this coverage won’t provide for the costs needed to repair any defective work, only the damage that results from defective work. Terms, conditions, and exclusions all vary policy to policy, so it’s important that clients read up on what’s included in their coverage.

2. Builder’s Risk

Builder’s risk policies offer home builders comprehensive protection coverage specifically designed for buildings that are still under construction as well as protection against “named perils.” This kind of insurance covers the structure itself as well as materials and equipment. While the perils in a policy can vary widely, they usually include coverage for things like fire, vandalism, theft, wind, hail, and lightning.

A risk policy should also include common coverage exclusions, which most often include employee theft, earthquakes, flood damage, and more.

3. Professional Liability Insurance

Professional liability insurance helps home builders who also double as designers. If a home builder of a residential construction project also includes a design component in their work, the professional liability rests on their shoulders. Professional liability coverage is the type of home builders insurance that isn’t usually included under other types of policies, so it needs to be pursued separately.

About American Team Managers Insurance Services

Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (877) 671-7503 to speak to a representative.