If the GC has Builder's Risk, do I need a policy of my own?

3 Replies

My partners and I recently purchased our first investment property together and we're looking to do a pretty large rehab that will take about 4 or 5 months.  We are going the route of hiring a GC and letting him run the project.  The topic of insurance came up and he let us know that he would be carrying builder's risk for the duration of the project.  If he has that, do I need to go out and purchase my own policy (fire & dwelling or vacant home)?  Will his insurance carry us all the way through the sale?

This is my first flip and I want to make sure I avoid risk wherever possible but saving $700 - $800 if I don't have to spend it would be great. 

Brandon

Yor GC's builder's risk covers His Work that he has completed.  I don't believe it covers anything else, and you'll need your own.

@Brandon Gebers

  builders risk covers fire theft that sort of thing.. you need GL you don't need to double up on fire.. but check with your insurance agent to double check

I have gone about 40 years in this industry with nary a fire in all the deals I had done. and this year I have had 3..

when we build new construction we buy a GL policy that will last for 10 years its also construction defect.. on fix and flip its not as critical as your generally just doing mainly cosmetics up updating systems.  ours protects us from a product liability like a LP siding issue that type of thing or the house settles and cracks like humpty dumpty... we can also buy 2 and 10 that goes with the owner.. like a home warrenty..

Insurance is such a racket these days.

Our subs have G L and have to name our GC.. then our GC has to name us then we have to buy our own.. so 3 layers of insruacne and about 4k per house for this.. and people wonder why building cost are going up up up

I agree that insurance is a racket.  Thanks for the advice.   Do you buy the 10 yr policy when you do a big remodel where you're adding sq feet or only when its brand new construction?

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