Construction insurance glossary.

A project-specific general liability policy purchased by a construction project owner to cover the owner's own liability exposure arising from contractors' operations, including completed operations.

A stand-alone liability policy covering the named insured's liability for bodily injury and property damage arising from a contractor's operations. Unlike Owner's Interest, it does not include completed operations.

A consolidated insurance program, or wrap-up, sponsored by the project owner that provides coverage for the owner, general contractor, and enrolled subcontractors under a single program.

A wrap-up sponsored by the general contractor rather than the owner, with the contractor assuming deductible, collateral, and administrative responsibilities.

A consolidated insurance program (OCIP or CCIP) that covers multiple parties on a construction project under one program rather than each party carrying separate policies.

A wrap-up structured to cover multiple projects that enroll over time, rather than a single fixed project, subject to eligibility thresholds set by the program.

A policy written to cover a single, defined construction project for its duration and completed-operations tail, rather than an annual policy covering all of an entity's work.

An annual liability policy covering all of an insured's projects during the policy period, as distinct from a project-specific placement.

First-party property coverage for a structure while under construction, insuring the building materials and work in progress against physical loss. It is distinct from the liability coverage an Owner's Interest policy provides.

The general liability policy carried by a contractor covering its own operations. An owner's protection under it depends on additional-insured status and the policy remaining in force.

Coverage for bodily injury and property damage claims arising after a construction project is finished, addressing the long-tail exposure that can attach to an owner.

An extension of completed-operations coverage, which on an Owner's Interest policy can run up to 10 years or the applicable statute of repose, whichever is less.

A defined category in a liability policy covering injury or damage arising out of the insured's completed work, away from premises the insured owns or rents.

A policy that responds to claims arising from events that happen during the policy period, regardless of when the claim is actually made. Most construction liability is written on this basis.

A policy that responds only to claims first made during the policy period, in contrast to an occurrence policy. Requires attention to retroactive dates and tail coverage.

The maximum an insurer will pay for a single covered occurrence, regardless of the number of claims or claimants arising from it.

The maximum an insurer will pay in total during the policy period, across all covered occurrences.

An amount the insured pays on a covered loss before the policy responds. Unlike a deductible, the insured typically handles claims within the SIR directly.

The portion of a covered loss the insured bears before the insurer pays, after which the insurer responds up to the applicable limit.

The party or parties specifically named on the policy declarations, holding the broadest rights and responsibilities under the contract.

Contract language requiring one party's coverage to respond first and without seeking contribution from another party's insurance, common in owner-contractor agreements.

A policy provision determining how coverage responds when more than one policy applies to the same loss, such as pro-rata sharing or excess treatment.

An insurer's obligation to provide and pay for the legal defense of a covered claim, often broader than its duty to pay a judgment.

On a claims-made policy, the date before which occurrences are not covered, limiting how far back the coverage reaches.

An extended reporting period on a claims-made policy that allows claims to be reported after the policy ends, for occurrences during the policy term.

A written amendment to a policy that adds, removes, or modifies coverage. Optional Owner's Interest coverages such as pollution and subsidence are added by endorsement, subject to appetite.

A provision that limits an insurer's exposure if the insured refuses to consent to a proposed settlement, capping the insurer's obligation at the amount it could have settled for plus defense costs to that date. A 'soft' hammer clause shares further costs on an agreed percentage basis.

A provision under which an insurer gives up its right to recover a paid loss from a third party, commonly required between owners and contractors by contract.

An insurer's right, after paying a claim, to pursue recovery from a third party responsible for the loss.

A policy provision that removes certain risks, activities, or conditions from coverage. Reviewing exclusions is essential to understanding what a policy actually covers.

An exclusion, common in some contractor policies, removing coverage for residential or habitational work such as condominiums and apartments.

Coverage for liability the insured assumes under an 'insured contract,' such as an indemnity agreement, within the terms of the policy.

How a policy treats claims between insureds under the same policy. A separation-of-insureds provision generally allows the policy to apply to each insured separately.

Legal responsibility that attaches to one party (such as an owner) for the acts of another (such as a contractor), even where the owner was not directly negligent.

A claim in which an injured worker sues a third party (such as the owner), who then seeks recovery from the worker's employer. Owner's Interest generally addresses these; OCP typically excludes them.

A party added to another's insurance policy, granting them certain coverage. For owners, additional-insured status on the contractor's policy depends on that policy staying in force with adequate limits.

An endorsement automatically extending additional-insured status to parties as required by contract, without listing each one individually.

A contractual promise by one party to compensate another for specified losses or liabilities, a core mechanism of construction risk transfer.

A contractual provision in which one party agrees not to hold another responsible for certain losses or damages.

A state law limiting the extent to which liability can be transferred by contract, affecting how much risk an owner can shift to a contractor.

A law setting an outer time limit, varying by state, within which construction-related claims must be brought, regardless of when the injury is discovered.

A law setting the period within which a claim must be filed, generally running from when the injury or damage is discovered.

The practice of shifting potential liability from one party to another through contracts and insurance, central to how construction projects allocate risk.

A legal doctrine under which multiple parties can each be held responsible for the full amount of a loss, allowing recovery of the whole from any one of them.

A deficiency in design, materials, or workmanship that causes damage or loss, often surfacing after completion and giving rise to long-tail claims.

The party with primary control of a construction site and the work performed there, typically responsible for hiring and coordinating subcontractors.

A specialty contractor hired by the general contractor to perform a defined scope of work, such as electrical, mechanical, or demolition.

The contractor holding the primary contract with the owner, responsible for delivering the project and often engaging subcontractors.

The entity that commissions and holds an interest in a construction project, bearing ultimate risk and the party an Owner's Interest policy protects.

An entity that initiates and finances a project, often the owner or acting on the owner's behalf, and a common purchaser of Owner's Interest coverage.

The dismantling or removal of existing structures, among the higher-hazard construction activities. Demolition, including demolition-only projects in progress, can be within Owner's Interest appetite with proper controls.

A fixed crane used on larger construction sites for lifting heavy materials at height, a high-hazard operation that can be in appetite with verified operator insurance and safety controls.

Lifting activities using mobile or tower cranes, subject to heightened underwriting scrutiny given the severity of potential losses.

The direct costs of physical construction, such as labor and materials, as distinct from soft costs like design and financing.

Indirect project costs such as architectural, engineering, legal, and financing fees, which may factor into overall project risk.

The point at which a project is sufficiently complete for its intended use, a milestone that can affect when completed-operations exposure begins.

A list of remaining items to finish or correct before a project is considered complete, generated near the end of construction.

Downward movement of ground supporting a structure. Subsidence coverage is available on an Owner's Interest policy by endorsement, subject to appetite.

The gradual settling or sudden sinking of the ground surface, which can result from excavation, dewatering, soil conditions, or nearby construction, and can cause damage to adjacent structures.

A broad category of ground-related perils, including subsidence, settling, and shifting, often addressed through specific policy language or endorsements.

Temporary structural support installed to prevent collapse during excavation or demolition, a key control for adjacent-property and subsidence risk.

Strengthening or extending the foundation of an existing structure, often required to protect neighboring buildings during adjacent construction.

Coverage for claims arising from pollution conditions, available on an Owner's Interest policy by endorsement with multiple ISO options, subject to appetite.

The ability of a policy to respond to covered losses that are uncollectible under an underlying policy, for example when the underlying limits have eroded.

Insurance placed with a non-admitted carrier for risks that admitted carriers may not write. Surplus lines carriers generally do not participate in state guaranty funds.

An insurer licensed by a state and subject to its rate and form regulation, whose policyholders are generally protected by the state guaranty fund.

An insurer not licensed in a given state but permitted to write certain risks through surplus-lines channels, offering flexibility for hard-to-place exposures.

A document evidencing that a party carries insurance, including coverage types and limits, often required from a general contractor by a project owner.

A report of an insured's historical claims, used by underwriters to evaluate risk and price coverage.

The process by which an insurer evaluates a risk to decide whether to offer coverage and on what terms, price, and conditions.

The range of risks an insurer is willing to write. Coverages 'subject to appetite' depend on the specifics of the project meeting underwriting criteria.

An underwriting step in which a risk with certain characteristics is reviewed by a carrier before terms are offered, rather than quoted automatically.

Security, such as a letter of credit or cash, that a program may require from a sponsor to guarantee obligations like deductibles, common in wrap-ups.