Builder’s Risk vs. Commercial General Liability: Understanding the Difference
At a basic level, confusion in construction insurance begins with overlapping terms and ambiguous coverage limits. One of the most common rivalries that people look for is Builder’s Risk vs. Commercial General Liability, and it makes sense why so many search for that particular comparison. Both coverages are critical during construction, but they protect against two very different types of risks.
When it comes to insurance information and policy details, a lot of store owners look to places like Summit Insurance for advice on the way their coverage structures work.
What Is Builder’s Risk Insurance?
Builder’s risk is a short-term insurance policy specifically designed for buildings under construction or renovation. It is designed to preserve the form of, and materials used in, the Completed Project.
What Builder’s Risk Typically Covers
Builder’s risk insurance usually includes protection for:
- Damage to the building under construction
- Theft of materials, tools, or equipment on-site
- Fire, smoke, and certain weather-related events
- Materials stored on-site or in transit
This policy exists only during the construction phase and ends once the project is complete or occupied.
What It Does Not Cover
Builder’s risk insurance does not cover injuries, liability claims, or bad workmanship. That is where the other policies come in.
What Is Commercial General Liability Insurance?
With commercial general liability (CGL) insurance, third-party risk is the priority. Instead of covering the building, it covers claims for bodily injury, property damage, or even personal injury resulting from construction activities.
What Commercial General Liability Covers
CGL insurance generally protects against:
- Injuries to third parties on or near the job site
- Damage to someone else’s property
- Legal defense costs related to covered claims
- Certain advertising or personal injury claims
Unlike builder’s risk insurance, CGL coverage is not limited to the construction phase and can remain active throughout business operations.
Local policy differences can make a difference, although businesses may consult providers like Summit Insurance Kelowna for policy interpretations specific to the region.
Builder’s Risk vs. Commercial General Liability: Key Differences
Although both policies are used during construction, their roles are very different:
Builder’s Risk
Commercial General Liability
Protects the structure
Protects against liability claims
Covers physical property damage
Covers bodily injury and third-party damage
Temporary coverage
Ongoing business coverage
Project-specific
Business-wide protection
Understanding this distinction helps avoid coverage gaps that could become costly later. Also, learn the purpose, coverage options, and how to choose the right tenants insurance!
Why Both Policies Matter in Construction
The comparison between Builder’s Risk vs. Commercial General Liability isn’t a matter of choosing one or the other. They are usually colleagues. Builder’s risk covers what is being built, while commercial general liability covers how construction activities affect other parties.
Each policy triggers on a separate risk, and in combination, they provide a more holistic insurance platform over the span of a project’s life. Protect belongings, liability issues, and more with renters insurance!
Final Thoughts
Builder’s Risk vs. Commercial General Liability might initially get mixed up, but the two are distinguished once you recognize what each serves to protect. One is to preserve the system and order itself, and the other is to govern responsibility toward others.
At SummitCover, we want to make insurance easy and useful so you can make decisions with confidence. Understanding the differences in these coverages is a wise move in order to ensure that any construction project is protected with confidence.
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