Imagine a scenario where your client hires a general contractor to build a custom home on a newly purchased lot. They are not managing the work or regularly visiting the site. They are funding the project and waiting for construction to unfold, relying on the structure of their property and casualty insurance products to protect them when it matters.
A few weeks into the build, a delivery driver trips over exposed rebar near the temporary driveway and suffers a serious injury. The general contractor is insured, but the property owner is named in the lawsuit.
This is where the gap becomes clear.
There is no homeowners policy in place because the structure is not yet eligible for one. Business owners or landlord policies do not apply. And while the contractor may carry liability coverage, it may not extend far enough to defend the owner or address the full scope of exposure.
Owner’s interest general liability (OIGL) provides protection during this phase. It covers the liability of a project owner during construction before traditional policies are in effect — and before the owner is recognized by coverage that applies to completed structures or operational properties.
For brokers, understanding when and how to recommend OIGL is both a client service and a professional distinction. This coverage supports the financial party behind the build and demonstrates a level of foresight that reinforces trust.
Owner’s Interest GL: Purpose, Placement, and Clients Who Benefit
What is an owner’s interest GL policy? At its core, this coverage provides third-party liability protection during construction, covering project owners who fund the work but remain hands-off. Although they do not perform or oversee the labor, these owners often face responsibility for injuries or property damage that arise on-site.
Unlike a contractor’s general liability policy, which protects the contractor’s business and operations, OIGL directly insures the owner. Contractor policies may extend limited coverage through additional insured status, but those provisions often contain conditions, exclusions, and caps that leave the owner exposed, especially in cases involving sole or contributory negligence.
OIGL eliminates that ambiguity by naming the owner as the insured and assigning dedicated limits. The policy applies throughout the construction period and, when needed, can extend into the completed operations phase. Rather than relying on indirect or assumed coverage, the owner holds a clear defense and liability solution tied directly to their financial interest in the project.
OIGL fits a broader range of projects than is often assumed. Brokers working with the following client profiles frequently encounter scenarios where OIGL adds meaningful value:
- Individuals building custom homes
- Leaseholders funding tenant improvements, such as restaurants or salons
- Residential developers installing roads, utilities, or shared infrastructure
- Individuals or small groups building spec homes for resale
One helpful question can guide the conversation: Who owns the project and hires the contractor? If the owner has an insurable interest but no comprehensive coverage during construction, OIGL often completes the protection strategy.
Where Standard Policies Leave the Owner Exposed
Coverage built for operational properties does not reach backward into construction. Homeowners, business owners, and landlord policies require an insurable structure, active use, or tenant occupancy before they respond. Until then, those policies leave the project owner exposed.
Contractor liability policies often provide some limited protection, but that protection is secondary and shaped around the contractor’s interests, not the owner’s. Additional insured status may apply under certain conditions, but it often excludes claims tied to the owner’s negligence or administrative responsibility.
Liability risk does not wait for policy activation. A claim can emerge at any stage, and without dedicated protection, the owner may face defense costs and legal exposure without support. OIGL fills that timing gap, responding when ownership creates responsibility but no standard coverage applies. Recognizing that threshold allows brokers to strengthen client programs and close avoidable gaps while reinforcing the value of well-structured insurance programs that address every phase of ownership.
Why OIGL Belongs in Both Client and Broker Strategy
In the earlier hypothetical scenario, a delivery driver tripped on-site, suffered a back injury, and filed a claim naming the owner. With an OIGL policy in place, here’s how this may have played out.
The insurer assigns legal counsel experienced in construction liability. That team manages the investigation, prepares the defense, and communicates directly with the injured party’s representation. The owner avoids legal fees and the burden of navigating the claim alone.
If the case results in a settlement or judgment, the policy pays those costs up to the stated limits. The coverage functions as intended, responding when the owner faces liability tied to the project, even without direct involvement in the work. These are the moments commercial insurance underwriters anticipate when evaluating risk tied to ownership, timing, and site conditions.
This is the role OIGL plays. It responds when legal responsibility falls on the owner during construction before standard operational policies apply. Brokers who include it strengthen the overall program and reinforce their role as long-term advisors.
Offering this protection helps preserve client trust, supports program continuity, and sets the stage for broader conversations around layered coverage and evolving risk.
Add Value by Filling the Gap
OIGL does not replace contractor or property insurance. It fills the gap that standard policies often leave during construction. Identifying this exposure sharpens your role as an advisor. Coverage tied to ownership, not operations, changes the claim outcome.
This concept applies across client types such as custom home builders, leaseholders funding build-outs, developers installing infrastructure, and nonprofits expanding facilities. Any client funding a project without operational coverage may carry unaddressed liability.
Review your current book. Look for funded builds. Ask who holds the contract and where responsibility lands. OIGL completes the structure.
Cochrane & Company helps brokers evaluate risk, time their coverage effectively, and build protection that holds through each phase. That clarity strengthens client outcomes and reinforces your value as a broker who sees what others miss. Contact us to learn how our commercial property and casualty insurance solutions can help you protect project owners from day one.
About Cochrane & Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.
