Quick Warning for Contractor Risks!
If a commercial contractor is now doing residential work because of market conditions, watch out for a residential exclusion.
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Reports are that construction activity within the residential market is booming while construction activity on the commercial side is stagnant. This has led many contractors generally focused on commercial construction to venture into residential construction to supplement their income. Warning! Warning! Many commercial contractors have a residential exclusion endorsement attached to their commercial general liability (CGL) policy. If such an endorsement is attached, the contractor has no liability coverage for any work done on residential properties. Query your commercial construction contractors regarding any work on the residential side. Remind them of the exclusion; and if possible, have the exclusion removed if the insured is performing residential work. Completed Operations Once commercial construction returns to previous levels, the insured may cease residential operations; however, they still have a completed operations exposure. Know the state’s statutes of limitation and repose on residential construction and work to keep any exclusionary endorsement off the policy until those periods lapse. COVID has created many unexpected insurance issues. This may be one that has a high potential to slip through the cracks. Avoid the potential problems by notifying affected clients. Last updated: June 12, 2026 |
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