When you start a construction project, most of the focus goes to design, budgets, and finishes  –  but there’s one thing that can quietly make or break the experience: insurance.

Whether you’re adding an ADU, remodeling your kitchen, or building from the ground up, construction involves risk. Fires, theft, weather damage, or accidents can happen  –  and without the right coverage, the financial consequences can be severe.

At Berg Development, we believe protection is part of precision. Every project we take on is backed by comprehensive insurance, from the first blueprint to the final inspection.

This guide breaks down what California homeowners need to know about insurance during construction, how to avoid common gaps, and how Berg ensures your investment is secure every step of the way.

Why regular homeowner’s insurance isn’t enough

Most homeowners assume their existing insurance policy automatically covers renovation or new construction  –  but that’s rarely the case.

Homeowner’s insurance typically:

• Covers existing structures, not new builds or major remodels. 
• May exclude damage that occurs during construction. 
• Often denies claims if the property is vacant or under renovation for long periods. 

So, if your contractor accidentally starts a small fire during a remodel, or materials are stolen from your site, your standard policy may not help at all.

Bottom line: If you’re building or renovating, you need specialized construction insurance  –  not just your standard homeowner coverage.

Builder’s risk insurance – your construction safety net

Builder’s risk insurance (sometimes called “course of construction” insurance) is one of the most essential protections during a build.

It typically covers:

• Fire, vandalism, and theft 
• Weather-related damage (like wind or hail) 
• On-site materials, fixtures, and equipment 
• Temporary structures like scaffolding or fencing 

Example:
If a storm damages unfinished roofing or destroys materials stored on-site, builder’s risk insurance pays for the repairs and replacements  –  not you.

Coverage period:

• Begins when construction starts. 
• Ends once the project is complete and ready for occupancy. 

 Berg tip: Every Berg Development project includes verified builder’s risk coverage  –  so homeowners never have to worry about unseen risks.

Contractor’s insurance  –  what your builder should carry

Any reputable construction company should maintain its own contractor’s insurance portfolio, which protects both the company and you as the client.

At a minimum, contractors should have:

1. General liability insurance – Covers property damage or injury caused during work. 
2. Workers’ compensation insurance – Covers worker injuries on your property. 
3. Commercial auto insurance – Protects company vehicles used for deliveries or transport. 

Why it matters:
If a worker is injured or your neighbor’s fence gets damaged, you shouldn’t be held liable. Contractor coverage ensures those costs never fall on you.

 Berg carries all three, verified and up to date. We also provide proof of insurance before starting every project – complete transparency, no exceptions.

Liability insurance for homeowners

Even with a fully insured contractor, it’s smart for homeowners to maintain liability protection.

Your own insurance may need to be temporarily increased to cover:

• Visitors or subcontractors on-site 
• Equipment delivery accidents 
• Damage caused by unexpected events (like tree falls or floods) 

Ask your insurer about adding a construction liability endorsement to your policy for the project’s duration.

ADU-specific insurance considerations

ADUs (Accessory Dwelling Units) come with their own set of insurance questions – especially if you plan to rent the space.

For personal use (guest house, office):

• Once complete, your ADU can be added to your primary homeowner’s policy as an additional structure. 

For rental use:

• You’ll likely need a landlord or rental dwelling policy, which covers: 
  • Property damage 
  • Liability if a tenant or visitor is injured 
  • Loss of rental income if the unit becomes uninhabitable 

Pro tip: If you rent through Airbnb or short-term platforms, most standard policies don’t apply. Ask your insurer about short-term rental coverage or specialized riders.

What insurance doesn’t cover (and how Berg helps mitigate it)

Even the best insurance policies have exclusions  –  but a skilled construction team minimizes those risks before they happen.

Common exclusions:

• Poor workmanship or design errors 
• Normal wear and tear 
• Earthquake or flood damage (unless separately covered) 

At Berg Development, we mitigate these through:

• Strict quality control and licensed professionals
• Engineering compliance with California’s seismic and environmental codes 
• Project documentation and inspection reports to simplify any claims process
  
  

Updating your homeowner’s insurance after construction

Once your project is complete, it’s crucial to update your policy to reflect the new structure or improvements.

Why it matters:

• If you don’t, the insurer may deny claims related to new additions. 
• You might be underinsured, meaning your coverage limit no longer matches your home’s real value. 

Your updated policy should include:

• Increased dwelling coverage (to match total rebuild cost) 
• New structure coverage for ADUs or extensions 
• Adjusted personal property limits (if you’ve added furnishings or appliances) 

Berg provides all necessary completion documents, photos, and valuations to help your insurer adjust coverage smoothly.

How Berg keeps your project covered – start to finish

From the moment you sign with us, every Berg Development project includes:

• Proof of full contractor’s insurance and workers’ comp 
• Coordination with your insurance provider if needed 
• Guidance on ADU or remodel coverage requirements 
• Final project documentation for policy updates 

We don’t just build – we help you protect what you’re building.

Real-life example

Case study: Glendale ADU project
A homeowner added a detached 700 sq ft ADU. During framing, a windstorm caused partial roof damage.
Because Berg had both builder’s risk and liability insurance, the repairs were completed at no extra cost to the homeowner, with zero delay to the project timeline.

That’s the difference between being covered and hoping for the best.

Conclusion

Insurance might not be the most exciting part of construction  –  but it’s one of the smartest investments you can make.

When something goes wrong (and in construction, it sometimes does), being fully covered is what keeps your project – and your peace of mind – intact.

At Berg Development, every design-build project is protected from day one, because quality construction means building with confidence.

Ready to start your insured, worry-free build? Contact Berg Development today to learn how we keep your project covered every step of the way.