General Liability

General Liability may best be described by what it is not.  It is not a performance bond (transfer of financial responsibility to a third party to ensure completion of the job or proper workmanship). It is not a warranty (ensures performance of your product to guidelines, code or specifications).  It is not pre-paid legal insurance that responds any time you may be involved in litigation.  General Liability provides coverage for bodily injury or resulting property damage caused by your product (the home).

1. Prior to accepting a proposal for General Liability coverage, you should be provided a copy of a sample policy with all forms and endorsements

• not all wording is the same on exclusions with the same name
• not all exclusions are interpreted the same by each carrier

2. Questions regarding any exclusions or endorsements should be answered in writing with the answer specifically addressing the exclusion/endorsement in question.  Common exclusions include:

• EIFS – synthetic stucco
• Subsidence – foundation settling
• Damage to your work caused by your work – does not cover damage by employees to work performed by employees
• Damage to work performed by subcontractors – after the Certificate of Occupancy is issued, your policy will not pay for any work done by subcontractors

3. All legal entities must be shown as a named insured

4. All exposures for each named insured should be reviewed annually and listed accurately at each renewal

5. Copies of the declarations page should be kept for a minimum of the term of the Statute of Repose

6. The home builder should understand clearly what will be charged to determine his costs (gross receipts, direct employee payroll, insured subcontractors, uninsured subcontractors)

7. You should know how employees are treated compared to subcontractors

• Employees may not be charged for General Liability and are not subject to subrogation for a covered claim
• Subcontractors may be charged for General Liability but we do not recommend it as they are subject to subrogation for a covered claim