Insurance Requirements During Construction: Remodel, Addition, or New Accessory Dwelling

What kind of insurance does a homeowner need during construction? What kind of insurance should a general contractor have?

A client just asked us about their personal insurance requirements during a $300,000+ new project that we are designing and building for them. 

Here is the question:  "I am assuming that we should be extending our house insurance to cover the new structure even during construction. I don’t really know what this entails. I am going to call our home insurance company, but I wondered if New Avenue has any guidance about what and when to do at this point in our project. Many thanks for your help."

First, general contractor liability insurance and worker's comp insurance is a different world from what this owner is asking about and not the owner's responsibility. Those insurances cover mistakes or injuries on the job, and it's not the owner's responsibility to get that. An owner should request proof of this insurance from the licensed general contractor. General liability is not legally required all the time, so you may need to find out more about this as well.   

Assuming the general contractor has general liability and worker's comp in place, the owner wants insurance for hazards such as fire and weather. What if there's a tornado or the neighbor's grill catches their fence on fire, damaging the project? Your homeowner's insurance should cover that, not the liability or worker's comp.

Double check with your insurance first, though, and make sure the work is covered! We're not qualified to be an authority on insurance matters or sell it. And never assume your neighbor is smart enough to avoid doing something this foolish. We know a Fulbright Scholar who graduated from the best public university on the planet, and one time, he accidentally blew up a propane grill.