Business Insurance
Construction Insurance for Residential Development and Construction
Consider insurance before contracts are finalized, not after.
38+ years of construction insurance experience, including 10 years in builders' risk underwriting and 28+ years in retail brokerage.
Schedule a Project DiscussionWe help residential developers, general contractors, custom homeowners, and architects structure insurance and risk-transfer programs for construction projects, from large multifamily developments, condominiums, townhomes, apartments, and tract homes to high-end custom residences.
This practice is led by Cary W. White, Managing Director, who brings more than 38 years of construction insurance experience, including 10 years as a builders' risk underwriter and more than 28 years in retail brokerage. That means both an underwriting and a brokerage perspective on every project.
Our approach begins before asking carriers for quotes. We work with clients to understand the project, evaluate potential risks, help determine how risk should be allocated among the project participants, develop reasonable underwriting submissions, then structure and coordinate coverage that addresses the needs of each client and their budget.
Construction Insurance for Developers, Contractors, Owners & Architects
Our primary focus is residential development, including apartments, condominiums, townhomes, production housing and high-end residential construction.
Residential Developers
Insurance and risk-allocation advice for residential developers of:
- →Apartments
- →Condominiums
- →Townhomes
- →Tract and production housing
- →High-end custom and speculative homes
Development insurance involves more than purchasing builders' risk and liability policies. We help developers coordinate project insurance with construction contracts, lender requirements, subcontractor obligations, deductibles and retained risks, completed-operations exposures, and the responsibilities of the various project participants.
Cary has placed insurance for more than 100 construction projects, including high-rise concrete condominium projects, large wood-frame apartment developments, and single-family tract home communities.
General Contractors
Insurance planning and contractual risk-transfer guidance for general contractors building:
- →Apartments
- →Condominiums
- →Townhomes
- →Tract and production housing
- →High-end custom homes
We help contractors evaluate project-specific and annual insurance programs, understand insurance obligations before accepting them, develop practical subcontractor requirements, and address deductibles, retained losses, and other project risks contractually.
While annual insurance programs are more common, project-specific solutions can be a way to secure coverage for select projects through the statute of limitations.
Custom Homeowners
Insurance advice for homeowners building custom residences with construction budgets of $5 million or more.
At this level, construction risk extends well beyond a conventional homeowner's policy.
We help owners understand what should be insured by the owner, what should be insured by the general contractor, how existing property should be protected, and how the respective policies and contractual requirements should work together.
The objective is not simply to insure the new construction. It is to understand the owner's total exposure during construction and make deliberate decisions about who should bear each risk.
Project-specific insurance covering the homeowner exclusively can be a cost-effective option to secure coverage through the statute of limitations for construction defects, which can help protect the homeowner against future general contractor coverage impairment or insolvency.
Architects
Insurance and risk-allocation guidance for architects designing high-end custom residences.
Architects are often asked to help owners establish construction requirements, or become involved when insurance and contractual responsibilities overlap with design and construction administration.
We work with architects and their clients to develop practical insurance requirements, clarify responsibilities, and identify potential gaps before construction begins.
The objective is to help architects protect their clients and themselves from avoidable construction defect exposures, without asking the architect to assume responsibility for administering the project's insurance program.
Risk Allocation & Insurance Requirements
Insurance is only part of the equation.
Construction contracts determine who is required to insure what, who retains risk, and what happens when one project participant causes a loss affecting another.
Insurance requirements should therefore be developed alongside the contractual allocation of risk, not added after the principal decisions have already been made.
We work with clients and their legal counsel on:
Owner / General Contractor
Evaluate and negotiate insurance requirements between owners, developers, and general contractors, including:
- →Required coverage and limits
- →Additional insured requirements
- →Products/completed-operations requirements
- →Waivers and other risk-transfer provisions
- →Deductibles and retained losses
- →Project-specific versus annual coverage
General Contractor / Subcontractor
Develop practical subcontractor insurance requirements appropriate to the work being performed and the project's overall risk-allocation strategy. Requirements also need to be administratively realistic — imposing insurance obligations that cannot be effectively monitored or enforced can create problems of its own.
Deductibles & Retained Losses
Buying a policy with a deductible doesn't answer an important contractual question: who ultimately bears that deductible when a loss occurs? We help project participants consider responsibility for builders' risk deductibles, liability retentions, and other retained losses before a claim occurs, including situations where one participant causes a loss affecting another or multiple parties share responsibility.
Lender Requirements
Don't wait until days before closing to discover the lender's insurance requirements.
Construction lenders have their own interests to protect, and their insurance requirements do not necessarily constitute a complete insurance program for the project. We help developers evaluate and, where appropriate, negotiate lender requirements to reconcile:
- →What the lender requires
- →What the construction contracts require
- →What coverage is commercially available
- →What the project actually needs
Lender insurance requirements should be addressed early in the financing process. Developers are often presented with insurance requirements shortly before closing, when their negotiating leverage is limited and unexpected coverage requirements can materially affect the construction budget.
We help developers anticipate and address lender insurance requirements by presenting a proposed insurance program to prospective lenders before loan underwriting, or by obtaining the lender's complete insurance requirements before financing terms are finalized.
Landlord / Tenant Insurance Requirements
Review and coordinate insurance requirements arising from leases and tenant-improvement projects involving landlords, tenants, contractors, and lenders.
Purchase & Sale Insurance Requirements
Evaluate insurance obligations associated with acquisitions, dispositions, development agreements, and other transactions where responsibility for property or construction risk changes between parties.
Underwriting & Application Requirements
What you tell the underwriter matters.
Insurance applications should not be treated as administrative paperwork needed simply to obtain a quote.
Applications may contain representations, warranties, protective safeguards, and other statements upon which an underwriter relies when agreeing to insure a project. Those statements can become important if a claim occurs.
Cary was one of the original authors of the project liability/OCIP application that became widely used throughout the construction insurance industry and continues to form the basis of applications used by project liability underwriters today.
We help clients:
- →Navigate complex construction insurance applications
- →Understand representations and warranties before making them
- →Identify questions requiring clarification rather than assumption
- →Coordinate responses among developers, contractors, design professionals, and other project participants
- →Present complex risks clearly and accurately to underwriters
- →Avoid unnecessary inconsistencies between applications, contracts, plans, reports, and other underwriting information
Minimizing Underwriter Binding Conditions
A favorable quote can still contain significant conditions that must be satisfied before coverage will bind. These may involve:
- →Geotechnical recommendations
- →Water-damage prevention
- →Site security and surveillance
- →Quality assurance and quality control
- →Contractor experience
- →Protective safeguards
- →Minimum subcontractor indemnity, hold harmless and insurance requirements
- →Subcontractor controls
- →Construction schedules
- →Other project-specific underwriting concerns
Binding conditions should be understood, clarified, and negotiated where appropriate, so the carrier receives the assurance reasonably necessary to insure the risk without imposing obligations that are unnecessary, impractical, or inconsistent with the responsibilities of other project participants.
Why Involve a Construction Insurance Advisor Early?
Before contracts are signed
Negotiate insurance requirements while they can still be changed.
Before financing is finalized
Identify lender requirements before they affect the project's economics.
Before applications are submitted
Understand representations, warranties and underwriting conditions before making them.
Before coverage is bound
Coordinate the policies, contracts, deductibles and responsibilities of the project participants.
Construction Insurance Coverage
Once the project's risks and responsibilities are understood, the insurance program can be structured around them.
Builders' Risk & Property Insurance
Builders' risk protects the physical project during construction, but properly structuring coverage involves much more than establishing the construction value. Depending on the project, coverage may need to address:
- →New construction
- →Existing structures and property
- →Renovations and additions
- →Materials in transit or temporary storage
- →Water damage
- →Flood and earthquake
- →Testing and commissioning
- →Debris removal and supplemental coverages
- →Delay in completion
- →Loss of rents
- →Loss of use
Ownership, construction contracts, lender requirements, project schedules, deductibles, and responsibility for losses should all be considered when structuring the program.
Delay and loss of use is often the most important coverage on a project, because most losses take time to investigate, resolve, and repair. That delay can lead to significant loss of revenue and consequential damages. In some cases there may also be coverage for loss of use caused by damage to other property on site that the policy does not otherwise cover.
Project & Construction Liability
There is no single liability structure appropriate for every project. Options may include:
Project-Specific General Liability
Dedicated liability insurance written for a particular project, potentially providing limits and completed-operations protection that are insulated from claims arising from the contractor's other work.
OCIP / CCIP Wrap-Ups
Owner Controlled Insurance Programs and Contractor Controlled Insurance Programs can consolidate liability coverage for eligible project participants under a coordinated project-specific program. The decision involves more than comparing premium — enrollment, subcontractor requirements, deductibles or retentions, completed operations, administration, and contractual responsibilities all need to work together.
Premises Liability for Project Owners
Project owners sometimes rely on Owners and Contractors Protective Liability (OCP) coverage to address their liability exposure during construction. OCP coverage has important limitations and should not automatically be treated as a substitute for broader project-specific protection. We help owners evaluate those limitations and explore available alternatives based on the project’s actual premises and liability exposures.
Annual Practice Coverage
Annual general liability programs may be appropriate for some contractors and projects. The analysis should consider available limits, residential limitations or exclusions, completed operations, project-specific exclusions, deductibles and retentions, claims from other projects that may erode available limits, and contractual requirements imposed by the project.
Other Construction-Related Coverage
Depending on the project and contractual requirements, additional coverage may include:
- →Surety bonds
- →Contractors pollution/environmental liability
- →Professional liability
- →Excess and umbrella liability
- →Other project-specific coverage as circumstances require
Insurance Certificate Management
Insurance requirements only work if they are administered.
Establishing contractor and subcontractor requirements is the first step. Those requirements must then be monitored throughout the project. Certificate and insurance-document management can include:
- →Certificates and endorsements
- →Coverage limits and expiration dates
- →Contractor/subcontractor compliance
- →Renewal and deficiency tracking
- →Documentation of compliance
Certificates themselves do not establish or prove the full scope of coverage.
38+ Years of Construction Insurance Experience
Experience from both sides of the insurance transaction.
Construction insurance specialist | Builders' risk underwriter | Retail broker | Project liability/OCIP application co-author
10
years in builders' risk underwriting
28+
years in retail insurance brokerage
Experience Across Complex Residential Construction
- →OCIP/CCIP programs
- →Multifamily residential developments
- →High-rise condominium projects
- →Complex condominium developments
- →Large wood-frame apartment projects
- →High-end custom homes
- →Complex builders' risk projects
Cary's career has included underwriting builders' risk and complex property exposures, and advising residential developers, general contractors, and other construction clients on project-specific and annual insurance programs. That background affects how a project is approached. It does not begin with what policy can we quote? It begins with:
- →What can go wrong?
- →Who should bear that risk?
- →What have the contracts required each participant to do?
- →What will the insurance actually cover?
- →What has been represented to the underwriter?
- →Will the policies, contracts, and underwriting requirements work together when a loss occurs?
Insurance works best when those questions are addressed before the project structure becomes difficult or expensive to change.
Planning a project?
The earlier insurance, underwriting and contractual risk issues are addressed, the more options you generally have.
Let's talk before the contracts are finalized.
Schedule a Project DiscussionPrefer to talk by phone or email? Contact us.