When you begin planning home improvement projects or renovating your home or undertaking a home remodel, it’s essential to consider how these changes may affect your home insurance. Updating or remodeling your home or completing a remodel can affect your home insurance coverage and should be considered at the beginning of any renovation or home improvement project.
Before starting any renovation or home remodel, it is important to have a comprehensive plan in place that includes insurance considerations, budget management, contractor vetting, and necessary permits to ensure proper protection and a smooth process.
There’s one crucial step that can save you from significant financial and legal headaches down the road: ensure you’re named as an Additional Insured on your contractor’s insurance policy.
Why Additional Insured Status Matters
Being designated as an Additional Insured provides an essential layer of protection if a general contractor’s negligent actions cause injury on your property. As an additional insured, you benefit from extended liability coverages, further protecting you from a range of potential legal claims during renovation. This coverage is critical, especially when insurance companies decide to subrogate or when injured workers file lawsuits against property owners.
Real-World Examples Where Additional Insured Status Makes a Difference
Jesse’s Home Renovation Project: Jesse hires a general contractor for a major home renovation. In addition to reviewing the contractor’s Certificate of Insurance for commercial general liability and workers’ compensation, Jesse also requests to be listed as an Additional Insured on the commercial general liability policy. This simple step provides crucial protection against liability claims that might arise from the contractor’s work.
John’s Land Lease: John leases 5 acres of land for commercial use. He protects himself by requiring the lessee to name him as an Additional Insured on their liability policy, thereby transferring potential risks away from his personal exposure.
Joan’s Non-Profit Board Service: Joan serves on a non-profit board and verifies that the organization carries Directors’ and Officers’ insurance with an indemnity agreement that limits personal liability for board members regarding the organization’s negligent actions.
Your Risk Management Checklist
- Written Contract Required: You must have a written contract between you and the contractor requiring the contractor to name you (the owner) as additional insured. No contract means no coverage.
- Get Added to Contractor’s Insurance: Make sure the Certificate of Insurance (COI) reflects you or your property as Additional Insured. While the COI itself is not the policy, it’s evidence that the coverage is in place.
- Verify Coverage Types: Ensure the contractor has both General Liability and Workers’ Compensation insurance. Without these coverages, you could be exposed to significant liability claims and lawsuits.
- Work With a Risk-Management Savvy Broker: An experienced insurance broker can help you navigate complex coverage requirements, including additional insured status, to ensure your real estate interests are adequately protected.
Additional Insured Items
Waiver of Subrogation
A Waiver of Subrogation prevents the contractor’s insurance company from suing you for any damages or injuries that occur during the contractor’s work. This is a critical additional protection.
Indemnification Clause
An Indemnification Clause requires the contractor to defend and hold you harmless for any claims resulting from the contractor’s negligence. This further reduces your exposure to legal claims and financial losses.
Additional Insured Additional Considerations
State regulations, specific project types, or unique risk scenarios can influence the necessary insurance arrangements. For any complex projects, consult with a legal professional or your insurance broker to ensure all the necessary protections are in place.
Implement these additional insured requirements in all your contracts to help protect yourself and your investment in any real estate or renovation project.
For personalized advice, contact Falcon West Insurance Brokers, your trusted San Diego insurance brokerage. Start online or call us now.
Your Additional Insured items.
Before starting renovations, review our home safety and insurability checklist.
Your carrier may also request documentation — here are the photos your home insurance carrier needs.
For the latest on the California insurance market, see our California homeowners insurance 2026.
Renovations are also a great time to consider installing smart water shut-off valves.