Constructing your own house requires owner builder liability insurance to be one of your top priorities. The insurance coverage shields homeowners from monetary losses from accidents, property damage, and legal disputes while building.
Many believe they do not require this insurance or fail to comprehend its operational principles. The false beliefs about this coverage create potential financial disasters.
The following article explains five misconceptions about owner builder liability insurance and their facts.
Myth 1: My Business Is Not Big Enough to Require Insurance
Owner-builders who construct homes believe insurance coverage is needed only by major construction firms. This is false. The risks associated with small projects include injuries and damage to adjacent properties. An accident will hold you responsible for its consequences. Owner-builder liability insurance protects you from paying medical and legal costs directly when the insurance is absent.
Myth 2: General Liability Insurance Provides Comprehensive Coverage
Owner-builders commonly believe their general liability policy will protect them from all risks. The insurance protects third-party injuries and property damage but fails to shield against all possible risks. The insurance policy does not cover work-related injuries, faulty construction work, or contractual disagreements between parties.
Myth 3: My Home and Contents Insurance Is Identical to My Business Insurance
Many people mistake their home and contents insurance for protection against construction risks. The coverage provided by standard home insurance excludes protection for construction-related risks and applies only to finished home damage. The coverage provided by your standard policy does not extend to protect you from fire damage, theft, or structural issues that occur during construction.
Myth 4: Lower Costs Mean Less Coverage
People tend to believe that cheaper insurance policies lack essential coverage or reliability. This is not always true. Insurance companies provide budget-friendly policies that include robust coverage benefits. The main success factor is examining different policies while carefully reviewing all details.
Myth 5: I Can Buy Insurance Later If Needed
Owner-builders commonly postpone insurance purchases until a problem develops. This is a risky assumption. The construction process needs insurance coverage to start. Insufficient insurance coverage during an accident or property damage will force you to bear all costs. Insurance companies might reject coverage for existing health conditions, leaving policyholders unprotected.
Conclusion
The wrong interpretation of owner-builder liability insurance exposes people to substantial monetary dangers. All construction projects require specific insurance coverage beyond general liability, and home insurance does not protect against construction-related incidents. Insurance cost does not determine its protective value, and putting off coverage exposes you to potential risks. Contact the Owner Builder Club to get the right liability insurance for owner-builders and build your projects without any worries.
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