Does My Builder Really Have Insurance?
When you hire a home builder to build your house, they usually produce a copy of their insurance policy. It will usually have policy limits of $1 million, $2 million or more. But what you don?t know is that almost always, the builder has presented you with a Commercial General Liability policy that not only does not cover the claim ? it probably excludes the very work you think it covers.
For instance, the insurance companies frequently refuse to cover damage caused by the builder even after a jury finds them responsible and the damage was even life threatening. Why? Because the policy that the builder bought, according the insurance carrier, specifically excluded any work that he did on the property. In other words, everything he does on the property is NOT covered and therefore, the insurance policy is a sham. Later, the builder is the one who must be able to cover the losses because the insurance carrier will claim there is no coverage.
What can you do about it? Not much unless you are starting to build the house after you read this. Otherwise, you may want to bring a claim against the builder for any contractual failures to get insurance.