Builder's (Owner's) Liability Insurance
Builder's liability insurance covers a project owner's statutory liability for bodily injury and property damage suffered by third parties in connection with a construction project.
Comparison profile
- Trigger
- Occurrence
- Insured interest
- The project owner's own, often strict and no-fault, statutory liability for bodily injury and property damage suffered by third parties in connection with a construction project, independent of the contractors' own liability.
- Rating basis
- Total construction sum or budget, Type and scope of the construction project (new build, renovation, demolition), Duration of the works
- Typical limits
- A per-occurrence limit typically aligned with the construction sum; often already included within private liability policies up to a sublimit (e.g. CHF/EUR 100,000-200,000), with a dedicated policy required above that.
- Typical deductibles
- Often none for private projects; a modest deductible for larger commercial developments.
- Target segments
- Private builders and homeowners, Property developers, General contractors, Institutional investors
Insured events
- Falling building parts or debris injuring a passer-by
- Inadequately secured excavation pits or trenches
- Damage to neighbouring buildings from earthworks or vibration
- Damage caused by construction traffic outside the site
Key exclusions
- Damage to the construction works themselves, covered under contract works insurance
- Liability of the contractors performing the work, covered under their own general liability
- Damage arising from defective design or planning, covered under the architect's or engineer's professional indemnity
- Intentional violation of building regulations
Concept
Builder’s liability insurance covers a project owner’s statutory liability for bodily injury, property damage, and resulting financial loss suffered by third parties — such as passers-by, neighbors, or tradespeople — in connection with the planning and execution of a construction project.
Liability Risks of the Project Owner
As the project owner, a person bears the duty of care for the safety of the construction site, even where the actual construction work is carried out by contracted companies. Typical risks include falling building parts, inadequately secured excavation pits, or damage to neighboring buildings from earthworks.
Distinction from Contractors’ General Liability
While the contracted construction companies insure their own liability through general liability insurance, builder’s liability insurance closes the coverage gap for the project owner’s own, independent liability, which continues to exist alongside the liability of the contractors performing the work.
Comparison and delineation
Builder’s liability insurance is complementary to, and not a substitute for, the contractors’ own general liability insurance and to the project owner’s private liability insurance: general liability covers the executing companies’ own fault-based liability, while builder’s liability specifically addresses the owner’s independent, often strict, statutory exposure that persists regardless of who is at fault. For smaller private projects the cover is frequently already embedded in the private liability policy up to a modest sublimit; larger new-build, renovation, or demolition projects with materially higher construction sums typically require a dedicated, separately rated builder’s liability policy.