Builder’s Risk vs. General Liability – What’s the Difference?
Two Key Coverages for Construction
Builder’s risk and general liability are two of the most common insurance requirements in Texas construction projects. While both are essential, they serve very different purposes:
- Builder’s Risk
protects the project itself—materials, structures, and sometimes temporary works.
- General Liability protects against lawsuits when your work causes injury or property damage to others.
Builder’s Risk = Property Coverage
Builder’s risk covers physical losses like fire, theft of materials, vandalism, or storm damage during construction. It ensures the investment in labor and materials isn’t lost before the project is finished.
General Liability = Liability Coverage
General liability covers third-party claims—for example, if a visitor is injured on site or construction activities damage a neighbor’s property.
Why You Likely Need Both
Builder’s risk and general liability do not overlap. One protects the project; the other protects your business. Most lenders, municipalities, and general contractors in Texas require both before work can begin.
Other Related Coverages
In addition to these, contractors often need:
- Workers’ Comp for employee injuries
- Commercial Auto
for work trucks and crews on the road
Get Guidance for Complete Coverage
Ironwood helps contractors build the right insurance package to avoid gaps—combining builder’s risk, liability, and other coverages into one streamlined solution.
Frequently Asked Questions About Builder’s Risk vs General Liability
Do I still need general liability if I have builder’s risk?
Yes. Builder’s risk only covers damage to the project itself.
Does general liability cover my materials on site?
No. That’s where builder’s risk comes in.
Are these policies required by law in Texas?
Not by law, but they’re almost always required by contracts or lenders.
Can Ironwood package both policies together?
Yes. We often write both coverages to streamline costs and simplify renewals.