A general contractor hands you a contract for a renovation. The insurance section requires general liability at a stated limit, and somewhere further down it mentions builders risk. You already carry the first one. You are not sure whether the second is yours to buy, the owner’s, or already handled.

That situation comes up constantly, and it usually gets resolved by assumption rather than by reading.

The distinction itself takes one sentence. Builders risk covers the project. General liability covers what your work does to other people and their property.

The useful part is everything after that sentence, because the questions contractors actually run into are not about definitions. They are about who buys the policy, what happens to the building that was already there, and what the deductible looks like when a storm arrives mid-job.

Who Buys It Is a Contract Question, Not an Insurance One

Builders risk can be purchased by the owner or by the contractor. Both arrangements are common, and neither is automatic.

The contract should say which. When it does not, two failures happen: nobody buys it, or both parties buy it and discover overlapping coverage after a loss when the carriers argue about who responds.

Read the insurance section of the agreement before you sign it. If the owner is providing builders risk, ask to be named as an insured on it — otherwise a loss to the work in progress is the owner’s recovery, not yours, and you may still owe the work.

On a Renovation, the Existing Building Is a Separate Question

This is the one that matters most for remodel, tenant improvement, and service work, and it is where contractors get caught.

On new construction there is one thing to insure: the work in progress. On a renovation there are two — the work you are performing, and the building that already existed.

Builders risk covers the work in progress. It does not automatically cover the existing structure.

If a fire starts during your renovation and damages the original building, the question of whose policy responds depends on whether existing structure coverage was arranged, and by whom. The owner’s property policy may also have exclusions or conditions that apply once construction begins — some property policies restrict coverage during renovation above a certain scope or value.

Three things to settle before starting a renovation:

Whether the builders risk policy includes existing structure coverage. Whether the owner’s property insurer has been notified that construction is happening. And who is responsible if the existing building is damaged by the work.

Contractors who ask these questions look like professionals. Contractors who discover the answers after a fire do not.

What General Liability Does Not Do

General liability responds when your work injures someone or damages someone else’s property. It funds your defense.

But two exclusions define its edges, and they are the reason builders risk exists alongside it.

The “your work” exclusion means general liability does not pay to repair or replace your own defective work. If the installation failed, correcting it is your obligation. What responds is the damage that resulted.

Care, custody, and control excludes damage to property in your control and to that part of the property you are working on.

Between them, general liability will not pay when a storm destroys the work you have in place, when materials are stolen from the site, or when your own installation has to come out. Those are property losses on a project, which is builders risk territory.

When Coverage Starts and When It Ends

Builders risk policies are project-specific and time-limited, and the endpoints matter.

Coverage typically terminates on the earliest of several triggers: the project reaching completion, the owner taking occupancy, the policy term expiring, or the property being put to its intended use.

Occupancy is the one that surprises people. A tenant moving into part of a building, or an owner beginning to use finished space while work continues elsewhere, can end coverage on a policy everyone assumed was still in force. Phased projects and tenant improvements in occupied buildings run into this constantly.

If your project will be partially occupied during construction, that needs to be disclosed at binding, not discovered at claim.

Extensions are available when a project runs long, but they have to be requested before the policy expires. A policy that lapsed mid-project cannot be extended retroactively.

Named Storm Deductibles Are Not Ordinary Deductibles

In Florida this is the provision that changes the math on a hurricane claim.

Builders risk policies covering Florida projects commonly carry a separate windstorm or named storm deductible expressed as a percentage of the insured value rather than a flat amount. On a substantial project, that percentage produces a retention far larger than the standard deductible on the same policy.

Two consequences worth planning around. The out-of-pocket exposure on a storm loss can be significant even with coverage in force. And the percentage may apply to the total insured value rather than the amount of the loss, which is not intuitive.

Ask what the named storm deductible is and how it is calculated before hurricane season, not during it.

Flood Is Usually Excluded

Builders risk policies commonly exclude flood, and in Florida that gap has teeth.

Storm surge, rising water, and heavy rainfall accumulation are flood rather than wind, and the distinction gets litigated after every major storm. Projects in flood zones, in low-lying areas, and near the coast should address this separately rather than assuming the builders risk policy reaches it.

The same applies to earth movement in most forms.

Soft Costs Are Frequently Left Out

A covered loss stops a project, and stopping a project costs money beyond the physical damage.

Extended financing and interest, additional design and supervision fees, permit re-issuance, extended general conditions, and the owner’s lost income or rent all follow from a delay. Soft costs and delay in completion coverage address these, and they are frequently omitted from the base policy.

On a project where a delay would create real financial consequences for the owner, this is worth asking about specifically.

Theft From the Site

Materials and equipment staged at a project are a persistent target throughout Florida, and copper, appliances, and mechanical equipment go first.

Builders risk generally covers theft of materials intended to become part of the project. It generally does not cover your own tools and equipment — those belong on a contractors equipment or inland marine form.

That distinction catches contractors who assume the project policy covers everything on site.

What to Confirm Before the Job Starts

Five questions, answerable in one conversation:

Who is providing builders risk, and am I named on it. Does it include the existing structure if this is a renovation. When does it terminate, and does partial occupancy trigger that. What is the named storm deductible and how is it calculated. And are soft costs included.

Getting those answered before mobilization is the difference between a coverage program and an assumption.

Related coverage: Builders Risk Insurance · General Liability Insurance · Commercial Property Insurance · Commercial Umbrella Insurance

Talk It Through Before You Sign

Prestige Insurance Group works with contractors throughout Miami-Dade, Broward, Palm Beach County, Orlando, Tampa, the Treasure Coast, and across Florida — on renovation, tenant improvement, remodeling, and service work.

If you have a contract in hand, bring the insurance section itself rather than a summary. What it requires determines what has to be issued and who has to issue it.

Miami: 305-969-8776 Orlando: 407-993-2331 Stuart: 561-983-4333

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This article describes general insurance concepts as of publication. It is not legal advice, and policy terms vary by carrier and by project — review your specific contract and policy with your agent.