Warranties vs General Liability – What’s the Difference?

Basically, a warranty covers workmanship issues while general liability covers damage to property and/or injury to people caused by such workmanship issues. A warranty and a general liability policy actually cancel one another out. This can lead to trouble. For instance:

When your general liability insurer and your warranty company aren’t affiliated, you can find yourself in a litigious situation with both parties pointing their finger at each other. A good example is a home that has a failing beam (maybe it wasn’t spanned properly). The floor is sagging, but the beam hasn’t given way yet; however, it’s obvious that the beam will fail in time. Is this a warranty issue or is it a general liability issue?

While the beam holds, and no other property has been damaged, and no one has been hurt, any general liability insurer would say this is a problem for the warranty company. Then the homeowner submits a claim for kitchen cabinets that have pulled loose due to stress caused by the sagging beam. They also ask to be reimbursed for hotel expenses they incur because they are afraid to stay in the house. Would a warranty provider cover these things?

At this point, we enter a gray area resulting in endless debates over who is liable. With the RWC Insurance Advantage working with RWC, there are no gray areas; no "is it a liability loss or a warranty claim?" If it is a covered loss, either way, you (the builder) won't get caught in the middle.

So, which makes more sense? Two companies that are better at finger pointing and keeping you in that scary gray area? OR two companies that work together providing you with comprehensive coverage and making that gray go away? If gray isn’t your company’s favorite color, contact us for a quote!

 Warranty Benefits from Residential Warranty Company

Insurance Benefits of the RWC Insurance Advantage

The RWC and RIA General Liability programs are both insured by Western Pacific Mutual Insurance Company, a Risk Retention Group, which has been rated “A- (Excellent)” by A.M. Best continuously since 2001.

*Not available in all states

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