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General Liability Insurance for Residential Remodelers

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Any residential remodeling business plan also needs to include insurance coverage. The right insurance coverage can protect you from all sorts of disastrous accidents. Which coverage is right for your needs? Check out our guide to learn everything you need to know about liability insurance for home renovators.

Is General Liability Insurance Necessary for Home Renovations?

General liability insurance protects your business in the event of any client property damage. This sort of insurance also helps pay the costs if your remodeling project ends up causing harm to anyone else's body, belongings, or reputation.

Whether you are running a huge remodeling business or just house flipping, insurance coverage is absolutely essential. Depending on where you live, having general liability insurance might be required.

Many state building codes impose an obligation to have general liability insurance as part of their state licensing requirements. This is typically the case if you’re working in New York.

Also, the type of insurance you will be required to have will vary by the county where you operate. For example, in some counties, contractors are only required to be bonded if they work on public government-funded projects, while other counties will require them to be bonded before they even get a license.

If in doubt, check out our guide on Contractor Insurance Requirements.

What Sort of General Liability Insurance Coverage Do You Need?

When shopping for contractors insurance, you have a few options depending on the service you offer:

  1. Flooring insurance: This will protect your business if your employee gets injured or sick while installing new flooring, or from property damage from stripping out the client’s existing flooring.

  2. Structural works insurance: This offers protection from a lawsuit filed by a client who claims the structural works are substantially different from that which was expected.

  3. Carpentry insurance: This will protect your business from unhappy clients who may sue you for incomplete jobs or poor workmanship.

These three types of insurance policies are incredibly similar. To make sure you get the correct coverage, it is a good idea to meet with an insurance agent who can assess your situation.

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What’s Included and Excluded in General Liability Insurance for Residential Remodelers?

To get a better idea of why general liability coverage for residential remodelling is so important, it can be helpful to take a look at the risks it covers you for:

  • Trips & falls: A potential homebuyer who trips on extension cords and gets injured.
  • Equipment failure: A piece of equipment malfunctions and causes a fire and burns down surrounding buildings you do not own.
  • Defamation: A lawsuit against your company as a result of making a comment on the original builder's lack of expertise.
  • Third-party bodily injury: A passerby being struck by a tool that fell off the roof.
  • Third-party property damage: A spilled bucket of paint that damaged a neighbor's car.

Depending on your policy, certain events might __not__ be covered (*excluded*) under your policy, such as:
  • Theft: Stolen equipment on your worksite.
  • Employee injury: Compensation for employees injured on the job.
  • Bad workmanship: The new homebuyer suing you for defective work.
  • Personal property damage: Your own property burning down.

How Much Contractors Liability Insurance Coverage Should You Get?

When picking the insurance for your next remodel, one of the most important things you need to pay attention to is your coverage amount. The coverage for your insurance refers to how much money your insurance company will give you in the event of a lawsuit.

Different policies calculate coverage limits differently. Some may give you a limit based on how much they will pay a year, while others limit how much they will pay for each claim.

To select your coverage amount, you should first look at local regulations. In many areas, contractor licensing requirements include the requirement to have insurance that covers at least $1,000,000 per occurrence. However, if you work in a high-stakes industry where extreme injuries or damage are likely, you might want more coverage. Since every case is different, it is important to get a customized recommendation from a professional.

How Much Does it Cost to Get Insurance for Home Improvements?

On average, contractors pay $90 per month, or $1,090 per year, for their liability insurance. However, every situation is different. Some people might pay a__s little as $500 or as much as $1,500__ for their insurance. Since there can be so much variation in prices, it is a good idea to contact an agent for a quote if you want to see how much your insurance would cost.

Five key factors will affect the overall cost of your insurance policy:

  1. Your location: If you live in a big city or other high cost of living area, your insurance premiums will be higher.

  2. Your desired coverage: If you want perks like a lower deductible or extra coverage, you might need to spend a little extra money.

  3. Your business' size: It costs more money to protect larger businesses. If you have multiple properties, employ a lot of workers, or work with very expensive houses, your insurance might be higher.

  4. The type of remodeling service you offer: Certain types of remodeling businesses are riskier than others. If you are working on high rises or doing tasks that regularly require heavy equipment, your insurance might be higher.

  5. Your claims history: If you have had multiple insurance claims or on-site incidences in the past, your rate might go up a little bit.

If you have any other questions about getting the right insurance for contractors, turn to CoverWallet. Our knowledgeable and trustworthy agents can provide you with more information and help you explore all your insurance options. Call now to get started.


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