Builders risk insurance vs. General Liability insurance for contractors

Both builders risk insurance and general liability insurance can help protect your business from the costs of unexpected accidents. But a builders risk policy usually only protects you on a specific project, whereas general liability insurance can be your everyday armor for your business operations and almost any job you take. Read on to learn more about each type of insurance, including when your policy applies, what it covers, who should buy what and how much you can expect to pay

Jump ahead  to learn:

• What is builders risk insurance?
• How is General Liability insurance different from a business risk policy?
• Compare builders risk insurance to General Liability
• Do contractors need both builders risk insurance coverage and General Liability?
• How NEXT helps protect contractors with business insurance

What is builders risk insurance?

Builder’s risk insurance — sometimes called contractors all risk insurance — can help protect a construction project in progress. It can cover damage to the building structure, materials or equipment caused by unexpected events such as fire, theft, vandalism or certain weather-related incidents.

Think of it as protection for the project itself. If materials are stolen from the site or a storm damages partially completed work, builders risk coverage could help pay for repairs or replacements.

Builders insurance typically lasts only while the project is active. Once construction wraps up, the policy usually ends. That’s why many contractors also carry general liability insurance to continue to help protect their business between projects.

Builder’s risk insurance typically does not cover:

• Accidents or injuries on the job site.
• Damage to tools, machinery or company vehicles.
• Liability claims from clients or third parties.
• Work completed after the project ends.

Note that NEXT doesn’t offer builders risk insurance at this time.

How is General Liability insurance different from a business risk policy?

General liability insurance — sometimes called slip and fall insurance — could help protect your contracting business from some of the most common risks of the profession, such as medical expenses for non-employees, repairs to property you or your employees accidentally damage, and some legal fees or defense costs. This could include a client who trips over your tools and gets hurt or your accidental damage to a wall during a remodel.**

Many clients and project owners expect you to have a general liability policy before they’ll hire you. For most contractors, general liability insurance is the first policy they buy.

General liability coverage can:

• Help protect you from the cost of non-employee injuries and property damage
• Be required to get or renew your contractor license
• Be required to submit a bid or sign a work contract
• Helps you look professional and serious about your work

Builders risk can help protect a work in progress, but general liability is the foundation that helps protect your business across most job.

Learn more: General Liability insurance for contractors

General liability insurance helps protect your business from a lot of risks, but it doesn’t cover everything. It won’t usually cover:

• Damage to your own tools, equipment or vehicles
• Employee injuries
• Damage to your business property
• Professional mistakes or design errors

These gaps are often filled by other types of contractor insurance, like workers’ compensation, tool and equipment coverage, or errors and omissions insurance. Together, these policies can help protect nearly every part of your business — from the people doing the work to the materials and equipment that make it happen.

Compare builders risk insurance to General Liability

Builders risk policies usually help protect a specific job in progress. General liability can help protect your reputation, finances and future work.

Do contractors need both builders risk insurance coverage and General Liability?

Some contractors carry both general liability and builder insurance — especially for large or complex projects. Together, they can help cover different aspects of risk.

For most small and mid-size contractors, general liability insurance offers everyday protection. A builders risk policy can be added for specific projects, but general liability remains the core policy that helps protect your business from the costs of the accidents you cause on the job.

How NEXT helps protect contractors with business insurance

NEXT makes it fast, easy and affordable to protect your small business — and you can do it all online.

We’ll ask a few questions about your business and give you a quote. You can select your coverage options and buy your policy in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Start a free quote with NEXT.