Fine. Were I your contractor, I'd get the additional insurance and roll the cost of it into my proposal.

Our bank requires me to have builders risk on top of my builders policy. In fact, I need to find a new policy, since the insurance company wouldn't renew it again, because the build has taken so long.

Builder’s risk and general liability are different things. You should definitely have builder’s risk if there is a new structure being built (addition or new home).

Builder’s risk is essentially a homeowner’s policy. A convenient, but imperfect, way to think of it is: general liability covers damage or loss the builder is at fault for, while builder’s risk covers damage or loss regardless of fault.

There is a reason it is called builder’s risk but it doesn’t make sense to most people (arguably to anyone), that I will skip unless you really want to know.

I DO want to know! My broker says it’s the GC’s buy. Would like to get your feedback and THANk YOU in advance!

@fozziesfuzz - So just to be clear... I don't believe that builders "carry" builder's risk. It is a one time policy on the specific structure. In my state, and most others, it doesn't need to be purchased by the builder. In fact, often builders will require that the homeowner purchase builder's risk before the project begins. I strongly suspect it is something you can buy. It is possible that some insurers have developed a carried version of a builder's risk policy, but that would certainly be the outlier.

From an insurers perspective the builder will make decisions to effectively build houses that increase the risk of loss to the homeowner. For example, your builder may choose to start your project in November when April is clearly the best time to start. However, it would be unrealistic for every house to start in April, so the builder's decision to start in November creates a small increased risk to the homeowner. A better name would be "builder's decision risk to homeowner," but it is called builder's risk. In reality, the nomenclature is a bit meaningless. The policy actually covers the homeowner's and builder's risk of loss if there are damages caused by weather, natural disaster, fire, and vandalism. Many will claim to cover theft but I wouldn't bet the farm on that one.

Some of those things would be covered by the general liability policy, but some wouldn't. If your neighbors are upset that you are blocking their shade and burn your addition down, I strongly suspect the builder's general liability would be reluctant to pay as it would be a struggle to prove the builder's fault, a builder's risk policy would pay because fault doesn't matter.

So in talking to a new broker, they are writing a policy that is a builders risk that turns into a homeowners policy. Not all insurance companies will do builders risk.

HI, HU,

General liability insurance and workers' compensation insurance are builder overhead items which I would expect your remodeler to carry. A builder's risk policy is project specific. If you'd like to have your builder purchase the policy for your project, then they would be entitled to mark up on the cost as Joseph Corlett noted above. I think you'll find it to your advantage to purchase the policy yourself. Speak to your homeowner's insurance agent about how it coordinates with your homeowner's policy, if at all.

All my clients get this covered with their home owner's policy. One client in 2018 had to find a new carrier. We call it a "course of construction clause"

You as the owner are the "developer" and/or "builder" hiring a GC. The policy protects you.

The policy benefits you if things go wrong, so you should be the one to source it. General liability carried by the builder only indirectly benefits you. It is designed to protect the builder’s liability and loss. But the builder is never liable for Acts of Nature and similar things, so without Builder’s risk, you are at risk for loss if a tornado hits the half built house.