Builder's insurance for larger jobs
A builder who has outgrown small residential work runs into a different set of insurance questions: contractual limits above a million, wrap up programmes, subcontractor default, and a bonding capacity that has to be proven before you can bid.
Small work is priced on your revenue and your trade. Larger work is priced on the contract. A general contractor's agreement will specify limits, name additional insureds, require a waiver of subrogation, and often demand that you carry an umbrella above your general liability. None of those are optional if you want the job, and each one is a real cost that has to be priced into your bid rather than discovered after you win it.
The most common expensive mistake at this stage is bidding a job whose insurance requirements exceed your programme. Signing a contract that requires five million in limits while carrying one million does not create coverage. It creates a breach, and it creates it at the worst possible moment.
Being able to do the work and being able to bond it are different things. A surety looks at your financial statements, your working capital, your backlog and your history, not your loss record. A builder can be an excellent contractor with a clean claims history and still be unable to bond a job larger than any they have completed before, because capacity is built on demonstrated financial strength.
This catches builders out when they win a project substantially larger than anything previous. The work is within their ability, the price is right, and the bond is refused. If a large job is on your horizon, the conversation with a surety needs to happen before the bid, not after the award.
Eight coverages cover almost everything a construction business faces. They do different jobs, and buying one does not cover the others.
Third party injury and property damage caused by your operations.
Medical care and lost wages for your own injured employees.
Vehicles used in the business, including owned, hired and non owned.
Your tools and equipment against theft, damage and loss.
The project under construction, plus materials on site.
A guarantee of performance or payment, not a transfer of risk.
Extra limits above your underlying policies once those are used up.
Claims from design work and advice, which general liability excludes.
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Tell us your trade, payroll and the states you work in. A licensed specialist will come back with real numbers.
