Could one overlooked clause in your insurance policy put your entire construction business at risk?
Are you unknowingly exposed because of the subcontractors you trust or the properties you once owned?
Many Arizona contractors think their policy will be there when they need it—until it isn’t. This guide cuts through legal jargon and shows you the hidden exclusions that can derail your operation. By the end, you’ll understand which clauses matter most, why they often trigger denied claims, and how to proactively protect your business from financial devastation.
In the Arizona construction industry, policy exclusions—not low limits—are what cause the biggest claim denials.
Contractors often discover too late that their policies don’t cover common worksite risks. That’s because many exclusions eliminate protection exactly when you assume you’re covered. Worse, these clauses are buried in endorsements, technical terms, or policy definitions that don’t surface until your carrier investigates a claim.
Arizona’s unique mix of residential growth, subcontractor reliance, and harsh environmental conditions only makes these risks more complex.
These exclusions apply when you damage property related to your operations—something that happens more often than many contractors realize.
Arizona’s subcontractor-heavy model and tight project schedules mean these exclusions come into play more often than most realize.
These two clauses eliminate coverage while work is still in progress.
This matters because most damage happens during construction, not after. Once work is finished, your completed operations coverage must kick in—but many Arizona contractors find that this has been limited or excluded.
If you’re dual-licensed (KB-1) or take on high-end residential work, double-check your policy. Some commercial carriers include hidden endorsements that eliminate coverage for B-licensed work.
Ask your broker directly: “Is residential work excluded anywhere in this policy?”
Arizona construction depends on subs—but many CGL policies have language that limits or excludes subcontractor-caused claims, especially if they aren’t properly insured or if you’re not listed as additional insured.
Look for endorsements like CG 22 94 or CG 21 39. If you see them, get clarification in writing.
Construction dust, paint fumes, adhesives, or debris runoff may all fall under your policy’s pollution exclusion—even if you’re not performing environmental work.
In Arizona, where dust regulation is strict and environmental conditions are sensitive, a Contractors Pollution Liability (CPL) policy is often essential.
Even if a claim triggers an exclusion, you may still prevail—if your documentation supports your position.
Maintain:
This documentation helps differentiate between active work and completed operations, clarify control and occupancy issues, and prove subcontractor responsibility.
The most financially damaging claims are the ones you thought were covered—until you read the exclusions. But with the right knowledge and preparation, you can structure coverage that protects you from both expected and unexpected risks.
If you’ve grown from solo jobs to managing subs and taking on larger contracts, now is the time to reassess your policy—not after a claim is denied.
The Flood Insurance Guru works with Arizona contractors who need more than just a certificate. We specialize in protecting builders who are growing, hiring, and documenting—just like you. We’ll review your exclusions, explain the impact, and help you make smart, defensible coverage choices.