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Have you recently decided to act as your own general contractor while building a new home? If so, there is one important question you need to answer before a single shovelful of dirt is moved – do you have adequate liability protection? If a subcontractor you hire is injured on the job you could be held responsible for their injuries. To avoid an expensive out-of-pocket payment and ensure your project runs smoothly, you need to make sure you have the correct coverage in place.


Acting as your own contractor switches you from the role of homeowner to business owner. In the role of business owner you become an employer. If you hire subcontractors to work on your home – they become your employees, and employers have a responsibility to carry the proper insurance for their employees.

If one of the subcontractors is injured on the job, it will be your responsibility to provide insurance to cover them. Even though you are building your own home, most states will require you to carry Worker’s Compensation Insurance to provide benefits coverage to injured workers.

Check with your insurance agent to find out what type of insurance you will need in your area, whether it’s a dwelling policy, builder’s risk policy or worker’s compensation coverage.


To avoid high medical costs due to injury, it would be wise to consider having a Worker’s Compensation policy — no matter your location. A dwelling or builder’s risk policy may not offer enough liability to cover excessive medical costs. A Worker’s Compensation policy is designed to handle high claim costs due to on-the-job injuries.

Exercise Caution When Choosing Subcontractors

Always ask for references when interviewing subcontractors – check the quality of their work and their conduct on the job. Make sure they took the necessary precautions to be safe and professional at work.

As a safeguard, ONLY hire subcontractors who have their own Worker’s Compensation coverage. When you choose subcontractors with their own insurance, you reduce your liability in case they are injured on the job. Make sure that a Certificate of Insurance is in your hands before allowing them on the job site. Companies and agencies today are able to send you a copy by email or fax, or they will have it printed for immediate delivery. As an additional precaution, call the company or agency and verify the certificate.

Don’t leave anything to chance. Before beginning construction on your new home, call your insurance agent. By consulting an expert, you can be sure that all your potential liabilities will be covered.