A builder is not legally liable for “betterment,” but is only liable for the actual value of the property they have damaged. In legal terms, property damage claims are governed by the principle of indemnity. The goal is to put the injured party back into the exact financial position they were in right before the damage occurred, no better and no worse.

For building contractors, public liability insurance is often seen as the ultimate safety net. It’s intended to protect you from the cost of accidentally damaging other people’s property. However, most liability policies contain exclusions that can leave contractors financially exposed in some circumstances. Understanding these critical gaps allows the contractor to be hyper-aware of the risk and implement other risk mitigation practices, so that the lack of insurance coverage never becomes an issue.