General Liability Overview

This insurance policy is probably the most critical and difficult to understand for builders.

It responds to covered lawsuits that allege the builder’s negligence resulted in bodily injury, property damage, personal injury, or advertising injury to a third party. A third party could be a trespasser, visitor, prospective buyer, employee of a sub, vendor, utility company, neighbor, competitor, buyer, or subsequent purchaser. They’re all kinds of different scenarios where third parties are injured and sue builders.

The concepts of bodily injury and property damage are easy to understand. Personal injury is defined as committing unintentional slander or libel. An example of advertising injury would be making false statements about a competing builder in your advertising materials. Another example would be infringing on the copyright of another builder by unintentionally using his blueprints or plans in your house design.

One of the major benefits of the policy is that it covers your legal defense cost of hiring an attorney. Even if you’re ultimately found not to be negligent, your legal defense costs can easily exceed $50,000 or even $100,000. The policy also pays up to the policy limits in the event that your insurance carrier decides to settle the case or if you go to trial and lose a jury verdict.