Monday, 29 April 2019 04:02

What is the Difference Between Builder's Risk and Construction Liability Insurance?

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What is the Difference Between Builder's Risk and Construction Liability Insurance?

For people who work in the construction industry, there is a huge risk of things going wrong every single day. Construction materials can become damaged, workers can be injured, and other incidents can occur that can cost the business both time and money.

For this reason, construction companies protect themselves using construction liability insurance and builder’s risk insurance. Here, we are going to look at the difference between these two types of insurance.

What Is Builder’s Risk Insurance?

Builder’s Risk insurance is a type of policy that covers the materials, equipment and property used by the contractor. This type of insurance usually covers the duration of the project from start to finish.

The types of things that builder’s risk insurance covers include damage which is resulted from hail, vandalism, fire or explosion, lightning strikes and much more. There are certain things that are excluded from this type of insurance including mechanical breakdowns, water damage and collapses.

What Is Construction Liability Insurance?

Construction liability insurance is a type of policy that will cover property damage and bodily injuries. This type of cover will protect a construction worker against any accidents that might happen on the job and the liability that tends to arise from these issues.


Construction liability insurance tends to cover events when someone is injured on your property or when you or your employees cause injury or property damage. This type of liability insurance will also handle things like claims against false advertising or damage to rented space. Construction liability insurance often excludes negligence, errors and lawsuits that involve things outside the scope of the policy.

What Is The Difference?

The main difference between these two types of policies is that builder’s risk insurance does not cover anything owned by anyone except the person that is insured. While construction liability insurance will cover things like workplace accidents and liability, builder’s risk insurance will focus on the equipment owned by the policy holder.

This difference is very important and anyone working in construction needs to understand what their policy covers. It is recommended that construction workers are covered by both types of policies in order to ensure both their business and their personal belongings are protected should anything go wrong in the future. Forgoing one of these types of policies is only going to put your business at risk.

Final Verdict

It is clear that there are some differences between these two types of policies and anyone in construction needs to understand these properly. In this industry, there is always a risk of someone getting injured and so business owners need to make sure that they have the right insurance policy to cover them and their employees.

If you work in the construction industry, make sure to invest in both types of construction insurance to ensure that your belongings and your business are protected against any sort of possible incident that might occur when you are working on a job.

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