Understanding the Differences between Homeowners and Builders Risk Insurance

It can be an exciting time to have a home remodel done. The homeowner hires a contractor to do the work, but the contractor cannot rely on the homeowner’s insurance for protection. Understanding the differences between builders risk vs homeowners insurance can keep the home protected.

Builders Risk

As referenced on https://www.sboneinsurance.com/, builders risk insurance covers the losses associated with temporary structures. This coverage protects the construction company while they work on a home including the scaffolding or a fire department service charge. Damages can arise from hail, vehicle crashes, fire, external theft, lightning strikes and vandalism. The company still needs a contractor’s general liability insurance to have protection against losses associated with other property damage or bodily injuries.

Homeowners Insurance

Like builders risk insurance, homeowners’ insurance does not cover all-natural disasters. Flood and earthquake insurance must often be purchased separately. The policy typically covers personal property inside the home and the building itself. Most policies include liability protection against bodily injury from the homeowner or their family to another. Some policies offer additional living expenses should the home be unlivable due to covered damage.

While similar, the differences between builders risk vs homeowners insurance are many. Contractors should have a builders risk policy for each project under construction. A contractor’s general liability plan covers many of the items a homeowner enjoys with their policy.