Design-Build Insurance: Why GL Alone Isn't Enough

A structural issue surfaces six months after project close. The owner’s legal team traces the cause to a design decision made during the integrated planning phase. Your general liability carrier receives the claim and issues a denial. Design errors are not a general liability exposure. They are a professional liability claim. You do not carry that coverage.

This is not an edge case. It is a gap that exists in the majority of small and mid-sized design-build firms operating today, and as design-build project delivery continues to grow, so does the exposure.

Why Design-Build Blurs Every Liability Line

In traditional project delivery, the liability separation is relatively clean. The architect or engineer carries professional liability — also called errors and omissions, or E&O — for design decisions. The general contractor carries general liability for construction execution. Claims fall into distinct buckets.

Design-build collapses that structure. When one entity holds both design and construction obligations under a single contract, the liability for problems at the intersection of design and construction lives entirely with the design-build contractor. The owner does not need to sort out whose error caused the problem. The design-build entity owns all of it.

According to the Design-Build Institute of America, design-build now accounts for more than 44% of US construction volume across commercial, institutional, and infrastructure sectors — a share that has grown steadily for over a decade. Engineering News-Record has reported that as design-build projects grow in size and complexity, more project owners are contractually shifting risk back to the design-build contractor, with insurance requirements as the primary mechanism.

General liability covers third-party bodily injury and property damage caused by your operations. It does not cover pure economic loss arising from a design error, an omission in drawings, or a specification that turns out to be wrong. Those claims fall under professional liability and without a professional liability policy, the design-build contractor is uninsured for them.

What Professional Liability Actually Covers

A professional liability policy covers claims arising from negligent acts, errors, or omissions in the performance of professional services. For design-build contractors, that means structural or mechanical errors in design documents, failure to meet code requirements identified during design, cost overruns caused by inaccurate specifications or scope documents, and third-party claims for economic loss tied to design decisions.

GL and professional liability do not overlap. They are designed to cover fundamentally different categories of loss. A project with a design flaw that causes water intrusion damage could generate both a GL claim for the property damage and a professional liability claim for the cost to redesign and correct the underlying error. Full protection requires both policies.

One additional detail matters here: professional liability policies are typically written on a claims-made basis, meaning the coverage in force when a claim is reported is what applies — not necessarily the coverage in place when the alleged error occurred. Maintaining continuous coverage and understanding the retroactive date on your policy is essential.

What Project Owners Are Requiring Right Now

Carrying professional liability is no longer just about internal risk management. More project owners, particularly on institutional, municipal, and private commercial work, are contractually requiring evidence of professional liability coverage before executing design-build agreements.

Sophisticated owners have become aware of the coverage gap and are shifting that risk back to the contractor through insurance requirements and indemnification language. If you are pursuing work where professional liability is a contract requirement and you do not carry it, you are either losing bids or misrepresenting your program.

A specialty programs review with an experienced broker can clarify what coverage limits are appropriate for your project types, whether your current commercial insurance program has any incidental professional liability extensions, and how to structure both policies so they work together without gaps or overlap.

Ready to make sure your design-build operation is fully covered? The team at Tooher-Ferraris has been helping contractors protect their businesses since 1932. Contact us today to schedule a no-obligation consultation.

Business Insurance

July 3, 2026

Your Tools Are on Three Job Sites. Are They Actually Insured?

Your commercial property policy covers your building. Your general liability covers third-party bodily injury and property damage. What covers the $80,000 excavator parked at a job site three towns over?

For many contractors, the honest answer is: nothing.

Construction is a mobile industry. Tools travel between job sites, equipment gets staged at temporary locations, materials sit on flatbeds overnight, and rented machinery moves in and out of projects daily. Standard commercial property policies are built around fixed locations, and they typically do not follow your assets when they leave the building. That gap is an inland marine exposure, and closing it is one of the most overlooked steps in a contractor’s insurance program.

What Standard Property Policies Don’t Cover

Commercial property insurance is designed to protect assets at a scheduled location — your office, your yard, your warehouse. When equipment leaves that location, most standard policies either exclude coverage entirely or impose sub-limits that bear no relationship to actual replacement costs.

The gaps vary by policy, but contractors commonly find that standard commercial property coverage does not adequately protect tools and equipment stored at or transported to temporary job sites, equipment in transit between locations, rented or leased machinery the contractor is responsible for under contract, materials stored off-premises awaiting delivery, or mobile equipment like compressors, generators, and forklifts that move regularly.

This is not a fringe concern. According to the National Equipment Register, construction equipment theft costs the US industry an estimated $400 million annually, and those losses disproportionately impact small and mid-sized contractors who cannot absorb a six-figure replacement without disrupting active projects. According to Gallagher’s 2026 market outlook, construction-related replacement costs remain 15 to 20% above pre-pandemic levels — which means a piece of equipment stolen or destroyed today costs significantly more to replace than the value on your current schedule.

What Inland Marine Insurance Actually Does

Despite its name, inland marine has nothing to do with water. The term originates from the insurance industry’s historical distinction between ocean cargo and goods transported over land. For contractors, an inland marine policy — often called a contractor’s equipment floater — is specifically designed to protect property that moves.

Coverage typically includes owned tools and equipment wherever they are located, whether on a job site, in transit, or at a storage facility. High-value scheduled items like cranes, excavators, and lifts can be listed individually with agreed value coverage. Blanket limits cover unscheduled tools and small equipment up to a per-item and aggregate cap. Equipment you rent or borrow and are contractually responsible for can also be included, as can technology tools used in the field.

Coverage terms vary significantly by policy, so reviewing the specific causes of loss, deductibles, and any exclusions for unattended equipment is essential. Many policies, for instance, exclude theft from an unattended vehicle unless there is visible evidence of forced entry — a detail that surfaces at claim time in ways contractors do not anticipate.

The Right Time to Review Is Before You Need It

The specialty programs available to contractors in 2026 include highly competitive inland marine options, even for accounts with prior claims. An inland marine review should include a current equipment inventory compared against your commercial insurance policy schedule, a check on rented equipment obligations and whether they’re covered, and a look at transit exposures for materials and tools in transit between sites. OSHA’s ongoing emphasis on jobsite safety equipment standards is a timely reminder that the tools enabling compliance with those standards need their own protection when they are off your property.

Ready to make sure your tools and equipment are actually covered everywhere your business operates? The team at Tooher-Ferraris has been helping contractors protect their assets since 1932. Contact us today to schedule a no-obligation consultation.

Personal Lines

July 2, 2026

What Happens When Something Goes Wrong on the Water? Your Homeowners Policy Probably Won’t Help.

Picture this: It is a July afternoon, the pontoon is out on the lake, and a guest slips on the deck and is seriously injured. The resulting medical bills and liability claim far exceed your homeowners insurance limits. Your insurer reviews the claim and informs you that your vessel was specifically excluded from coverage at the time of the incident.

This scenario is more common than most boat owners realize, and July is exactly when it tends to happen. Peak boating season in the US brings millions of recreational vessels onto lakes, rivers, and coastal waters and most of those owners are on the water with significant coverage gaps they have never been told about.

What Your Homeowners Policy Actually Covers on the Water

Most standard homeowners policies include some watercraft coverage with limits that were designed for a very specific kind of boat. Typical coverage applies to small, low-powered vessels: canoes, kayaks, or motorboats with engines under 25 horsepower. Physical damage coverage often caps at $1,500, and liability coverage may be limited or excluded entirely once a motorized vessel is involved.

According to the U.S. Coast Guard’s most recent Recreational Boating Statistics, there are more than 12 million registered recreational vessels in the United States, with documented accidents resulting in hundreds of fatalities and thousands of injuries each year. The majority of incidents that generate significant liability claims involve motorized vessels — exactly the category most homeowners policies are not built to cover.

If you own a pontoon boat, a bowrider, a jet ski, a sailboat over 26 feet, or any vessel with a higher-horsepower engine, there is a strong chance your homeowners policy will not respond meaningfully to a serious claim on the water.

What a Standalone Watercraft Policy Covers

A dedicated watercraft insurance policy is designed for how boats are actually used. Coverage typically includes physical damage to the vessel from collision, theft, sinking, fire, and vandalism. Medical payments cover injuries to passengers and other parties. Liability coverage addresses bodily injury and property damage caused by your vessel. Uninsured boater coverage protects you when an accident involves another vessel owner who carries no insurance.

Coverage terms vary significantly by vessel type. High-performance powerboats, yachts, and large sailboats may require specialty marine policies. Jet skis and personal watercraft are often written on separate policies given their higher accident rates. One critical distinction: agreed value vs. actual cash value. Agreed value policies pay the full insured amount after a total loss with no depreciation applied. Actual cash value policies depreciate the boat before calculating the payout — a distinction that matters significantly on older vessels.

The Liability Exposure Most Boat Owners Are Missing

Physical damage to the vessel is one concern. Liability is what most owners underestimate.

A serious boating accident can generate claims that rival major auto accidents — involving medical costs, lost wages, and pain and suffering awards. Standard homeowners liability, even where it technically applies, is rarely sufficient for a serious on-water incident. Pairing a watercraft policy with a personal umbrella adds a critical layer of protection that every boat-owning household should consider before the season gets fully underway.

A coverage review that examines your vessel type, how and where it is used, who operates it, and where it is stored can identify gaps in your current program before July gives you a reason to find them on your own.

Ready to make sure your time on the water is actually covered? The team at Tooher-Ferraris has been helping families protect what they enjoy most since 1932. Contact us today to schedule a no-obligation consultation.

Business Insurance

July 1, 2026

Is Your Equipment Schedule Accurate? Why an Annual Insurance Audit Belongs on Every Contractor’s Calendar

When did you last sit down and go through your equipment schedule, line by line?

For most contractors, the honest answer is: at some point during the original policy setup, and not since. That is a problem — and in 2026, it is a more expensive problem than it used to be.

Construction replacement costs remain elevated across the board. Equipment values have shifted. Over the course of a busy year, you have likely added tools, acquired new machinery, sold off old assets, or taken on rented equipment under contract. Some items on your current schedule may no longer exist. Others that do exist are not listed at all. That mismatch between what you own and what your insurance program actually covers is underinsurance and most contractors do not discover it until a claim forces the issue.

Why Equipment Schedules Go Stale

Insurance schedules are snapshots. They capture the state of your operation at the time the policy was written or last formally updated. Between renewals, equipment changes constantly — purchases, disposals, lease returns, rental agreements that come and go with specific projects. Most of those changes never reach your broker.

The result is a schedule that may reflect your operation from two or three years ago. According to Gallagher’s 2026 market analysis, construction-related replacement costs remain 15 to 20% above pre-pandemic levels. An excavator that cost $120,000 in 2021 may cost $140,000 or more to replace today. If your scheduled value is still $120,000, you will absorb that gap out of pocket after a total loss.

According to Sentry Insurance’s 2026 Construction Outlook, contractors who have not updated their equipment and property values within the last 12 months face the real possibility of discovering a coverage shortfall mid-loss when there is no opportunity to correct it. Beyond the dollar impact on a single claim, many inland marine and equipment floater policies include coinsurance provisions. If declared values are significantly below actual replacement cost, the insurer may apply a coinsurance penalty that reduces the payout on even a partial loss.

What a Good Equipment Audit Actually Looks Like

An equipment schedule review does not need to be a major project. At its core, it is a structured comparison of what you own against what is listed on your policy, followed by a conversation with your broker about whether the values, coverage structure, and deductibles still match your operation.

In practice, that means pulling your current equipment list from your fixed asset records and comparing it item by item to the policy schedule, identifying items that appear on the schedule but have been sold, returned, or written off, adding any equipment acquired during the policy period that is not currently listed, and updating scheduled values to reflect current replacement costs rather than depreciated book values.

One category contractors consistently miss: technology and field equipment. Laptops, tablets, GPS units, and laser measurement devices have real replacement costs. They also travel with crews daily, making them some of the most exposed assets on your program. Most were not on anyone’s radar when the original policy was set up years ago.

When to Do It — and How Often

The most natural time is 60 to 90 days before your policy renewal, giving your broker room to market updated values and structure coverage before the new period begins. The Dynamic Risk Synergy Portal offers loss control resources that complement a commercial insurance coverage review, helping identify both operational gaps and insurance program vulnerabilities before they become claims. At minimum, a formal equipment schedule review should happen once a year. If you have had a significant year — major acquisitions, new project types, expanded operations — more frequent reviews are warranted. Your insurance program is only as accurate as the information behind it.

Ready to make sure your equipment coverage reflects what your business actually owns? The team at Tooher-Ferraris has been helping contractors build accurate, complete insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

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Professional Liability vs. General Liability: Why Design-Build Firms Need Both (And Most Only Carry One)