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Owner/Builder insurance requirements

8 years ago

Hello

I am starting planning for my 2000 sq ft home to start construction in Northern VA next spring. I am planning to be my own GC as I am a superintendent for a production home builder. Does anyone know what insurance I need to have? General Liability? Do I need to officially open a business to get this insurance? Any help/advice is appreciated.

Thanks

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Comments (5)

just_janni
8 years ago
My bank asked for "builders risk". Insurance companies will issue to individuals.
PRO
Charles Ross Homes
8 years ago
Your lender will be a good source of information regarding insurance requirements. Generally, they require builders' risk, general liability, and workers' compensation insurance. You should also consider the risk of errors and omissions in the plans which could result in significant cost increases during construction. Talk with your architect or designer about whether they have errors and omissions insurance.

Good luck with your project.
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I've been in the commercial insurance business for over 20 years. The term "additional Insured" is one of the most mis-used terms around. I would suggest, if you have a good insurance agent, discuss this with him (unlike a lawyer, your agents advice is free). My advice would be: -Have the GC name YOU as Additional Insured on HIS General Liability policy and verify this via Certificate of Insurance. Make sure they have at least a $1,000,000 per occurrence limit. Having you name him is B.S. -Verify he has workers compensation coverage via Certificate of Insurance. If he says he doesn't have employees, ask to see the certificates from All of his subs and sub-subs. - If you are responsible for the Builders Risk (property Insurance), you can name him as a "loss Payee", in the event he has some property he owns that you have not taken possession (ownership) of yet. Good luck
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Your builders risk policy is a homeowner's policy minus personal property coverages that are generally 70 - 75% of the dwelling coverage. Your personal property won't be there and won't need as much coverage at this location. You should definately have a renters policy for your personal property at the unit you are renting and yes it will have some liability as well. You will want your own liability coverage in the event someone walks on your property and gets hurt or a child falls into a whole/basement/well etc. As materials are delivered they will be covered which is very important. Theives like to go ahead and help themselves to materials. Fire is also covered, I had a customer do what your doing and each time he got close to being done, the house burned down to the ground. Needless to say, he didn't build again but can't sell the property neither. There will be other coverage's but that will depend on which state your in and the policy coverage's issued there.
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When I had a kerfuffle with my homeowners' insurance due to remodeling, my incompetent agent managed to get them to cancel me due to mistaken assumptions and the world's worst communication. She said other companies would only cover me with a much-increased premium and then didn't respond for weeks at a time as the clock ran out on coverage. My nerves don't allow me to let my house go uncovered, so in a panic, I reached out to the company insuring my car at the time - MetLife. I already had history with them, and I have a very good credit rating, and they very nicely came back promptly with an offer to cover my house same day, for the same amount I'd been paying. SUMMARY: Try an insurance company where you already have a relationship as a known customer for another type of insurance.
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jmcclure1986
Original Author
8 years ago
last modified: 8 years ago
Thank you for your comments. So far I'm finding that the insurance companies are wanting me to have a contractors license. So that may be something I might have to do.
chellefnp
8 years ago
We went through a local Allstate agent, they had a policy from Zurich for builder's risk that was very affordable. We are not contractors, just the homeowner. If you have homeowner's insurance currently, check with your agent. Our policy covered general liability on the new property as well.
PRO
Charles Ross Homes
8 years ago
last modified: 8 years ago
As a homeowner/builder you incur different risks than a building corporation. Workers Compensation Insurance is important to protect you against the potential risk of an injured, uninsured worker suing you for medical expenses and/or lost wages.

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