Builders risk and general liability are both essential for Florida contractors — but they cover completely different things. Confusing them is one of the most common coverage gaps in construction.
General Liability: Third-Party Injury and Damage
General liability (GL) insurance covers claims made by third parties — people who are not your employees — for bodily injury or property damage caused by your operations. If a visitor trips over your tools and breaks their arm, GL pays. If your crew accidentally damages a neighboring property, GL pays. If a completed project causes damage after you've left the job, GL's completed operations coverage pays.
GL does not cover damage to the structure you're building. It does not cover your tools and equipment. It does not cover your employees' injuries (that's workers' comp).
Builders Risk: The Structure Under Construction
Builders risk insurance covers the structure itself while it's under construction — against fire, wind, theft, vandalism, and other covered perils. If the framing burns down before the drywall goes up, builders risk pays to rebuild it. If a storm damages the roof before it's complete, builders risk pays for the repairs.
Builders risk does not cover third-party injuries (that's GL). It does not cover your tools and equipment (that's inland marine). It does not cover completed, occupied structures (that's property insurance).
The Coverage Gap Between Them
The most important thing to understand is that GL and builders risk cover different things and there is no overlap — but there are gaps between them that neither covers:
- Your own tools and equipment: Neither GL nor builders risk covers this — you need inland marine/tools coverage
- Employee injuries: Neither GL nor builders risk covers this — you need workers' comp
- Faulty workmanship: Neither GL nor builders risk typically covers the cost to redo defective work — this is a contractor's risk that must be managed through quality control
- Design errors: If you're responsible for design, neither GL nor builders risk covers design errors — you need professional liability (E&O)
Who Carries Each Policy
On most construction projects:
- General Liability: The GC carries it, and typically requires subs to carry their own GL as well
- Builders Risk: Either the GC or the project owner carries it — this should be specified in the contract. On residential projects, the homeowner often carries it. On commercial projects, the GC typically carries it.
Before starting any project, confirm in writing who is carrying builders risk. If the answer is unclear, carry it yourself. A $500,000 project without builders risk coverage is a $500,000 uninsured risk.
Frequently Asked Questions
Do I need both builders risk and general liability?+−
Yes. They cover different things. GL covers third-party injury and damage claims. Builders risk covers the structure under construction. On any significant project, you need both.
Does general liability cover damage to the structure I'm building?+−
No. GL covers damage you cause to other people's property. The structure you're building is your work product — damage to it is covered by builders risk, not GL.
What if the homeowner has homeowners insurance — do I still need builders risk?+−
Standard homeowners insurance does not cover structures under construction. The homeowner needs to either add a builders risk endorsement to their homeowners policy or purchase a separate builders risk policy. Confirm this in writing before work starts.
Does builders risk cover hurricane damage in Florida?+−
It depends on the policy. Many Florida builders risk policies have separate wind/hurricane deductibles (1–5% of insured value) or exclude wind entirely in coastal areas. Review the wind provisions carefully before purchasing.
Published by Precision Underwriters Inc. dba Bright Coast Insurance — Licensed Florida Insurance Agency, License #L103957. This content was researched and written with AI assistance and reviewed by a licensed insurance professional. The information is general in nature and does not constitute insurance advice for your specific situation.