Construction Insurance

9 Replies


My company funds a construction. It owns the house with no mortgage on it. A project manager will find general contractor, get permits and handle the all aspects of the project. 

Do I have to get insurance for my company also or all the accidents, burglary etc are covered by general contractor's insurance?

What can go wrong?

There is a clause in the contract between my company and project manager that holds harmless my company.

Thank you

@Emin T. Are you asking about insurance for the construction project (i.e. builders risk) or professional liability insurance for your business?

Someone should be covering the builders risk insurance, this is typically defined in your contract (I personally pay for builders risk on my residential construction projects).

If your asking about it for your business, I can not help. 

I would get Builders Risk insurance. If you had a construction loan, you would be required to. It pays if a tornado takes down the structure, or fire, before completion.

I forgot to say there is an old house, it will be demolished and a new house will be built.

The project manager will get the project drawn. Gets city permits. Goes and finds subcontractors. Bills my company for all management costs, material costs, labor ...

I am just writing checks and deciding room count etc, floor planning, maybe colors, only basic stuff.

Who should insure what?

@Emin T. Either your GC or yourself will need to get the Builders Risk. This covers the loss of the project during construction in the event loss (fire, hurricane, theft, etc). Think of this like homeowner insurance, but for something under construction.

You may also need flood insurance, as a flood would not be covered by Builders Risk.

Your GC will have liability insurance that covers his business.

As the investor, i don't think you need liability insurance. But I might be naive on that point.

Can't recall the proper term at the moment, but construction (site) insurance is to cover pilferage, tools, vandalism during the construction.

The contractor *MUST* have his own liability insurance (ask to be added as Also Named), be bonded (to be sure the work gets done).

I'm not understanding your company's role in the building process.  Are you hiring the general contractor or are you strictly providing funding?  Who holds the contract with the property owner?  I need to understand the contractual relationships before I can give feedback on what risk needs to be insured.

Everyone, Thank you for comments and insights,


My company owns the land and hires project manager who will in turn finds the architect, get permits, hire subcontractors, select the materials, order materials, bill me for them. My comp pays everything and gets profits at the end.