Contractors Liability and Builder’s Risk. These are just two options when it comes to investing in insurance. Finding the insurance that suits your business requirements can be overwhelming at the best of times. It can be even more confusing when you hear the terms property damage and property replacement thrown into the mix.

Obviously, you want to ensure that you minimize the impact of risk to your contractor business. This article will give you the low down on both types of insurance and what they offer your business to lessen the confusion.


Property damage

Here we are referring to damage to a third-party’s property. For instance, a neighbor could sue you for damage to their vehicle or drive as a result of your work. You will need General Liability insurance for protection against a property damage claim. So, let’s look at what other coverage it gives you.


Damage to property

You will be protected if your company damages a customer’s property. For example, one of your crew accidentally breaks a client’s window during onsite work. But there are many other benefits.



Your business will be provided with coverage against injury claims by a third person. Note that coverage is not extended to your employees. For this, you require Workers Compensation.


Completed products

Protects your company against claims related to services you have completed or products produced. For instance, If the work undertaken by your company causes harm to your client, you will be insured if the client wants to hold you liable for costs.


Harm reputation

Is something as simple as using a photograph of work completed for promotional purposes wrong? If you do it without authorization from the client it could lead to you being sued. Your policy will protect your business in a case such as this.


Advertising mistakes

You are accused of taking a slogan from another building firm to use as your own. Contractor’s Liability provides coverage to deal with claims that you have infringed on others copyrights in your business’s advertising.


Property replacement

A property replacement policy like Builder’s Risk insurance offers your construction business protection in line with your project. So, if your property is damaged, it will be replaced. However, it is not coverage for third-party property damage. Coverage is typically for project damage resulting from fire, weather, and vandalism. It can include:

  • Residential new construction
  • Residential remodeling or smaller projects
  • Model homes and model home contents
  • Commercial property construction

Generally speaking, the owner of the project would purchase Builder’s Risk insurance to cover his build. But it pays for you as a builder, contractor, or sub-contractor to also obtain this policy.

Note: A Builder’s Risk policy may be necessary to show proof of insurance to comply with local city, county, and state building codes. This is often a condition attached to contracts.

Get advice from the best

Our team of dedicated agents are standing by to give your company the best insurance advice in the business. With over 23 years in the industry providing tailored packages for the contracting trade, you simply can’t go wrong. Call Farmer Brown Insurance at (888) 973-0016 for a free quote today.

Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.