Insurance Considerations for Driveway Projects

Why Insurance Matters for Your Driveway Project

A new driveway is one of the largest single-item investments you can make in curb appeal. It’s also one of the few home-improvement projects that takes place entirely outside—exposed to weather, traffic, and the occasional runaway delivery truck. Because of that, the financial risk is higher than most homeowners expect. The right insurance—both yours and the contractor’s—protects you from surprise bills, lawsuits, and heartbreak. Below you’ll find the key Insurance Considerations for Driveway Projects so you can move forward with confidence.

Check Your Own Homeowners Policy First

Before a single shovel hits the dirt, review the policy you already pay for. Driveway work can trigger several coverage areas you might not think about.

Is Your Driveway Even Covered?

Standard HO-3 homeowners policies usually list “other structures” at 10% of dwelling coverage. A 2,000 sq. ft. asphalt driveway can cost $12–15k to replace—easy to exceed that 10% cap. Call your agent and ask:

• Is the driveway defined as an “other structure”?
• Is coverage capped at 10% or is it a separate dollar limit?
• Does the limit apply per occurrence or per year?

Special Exclusions to Watch

Some carriers exclude damage caused by “earth movement,” “wear and tear,” or “faulty workmanship.” If your new driveway heaves because of an unstable sub-base, you could be on your own. Ask if an endorsement or rider can close those gaps.

Temporary Coverage While Work Is Underway

Most policies cover building materials for 30–45 days on premises. If the contractor stores 20 tons of pavers in your yard over a rainy weekend and they disappear, your homeowner’s personal-property section may pay—after the deductible. Verify time limits and dollar sub-limits.

Verify the Contractor’s Insurance—Every Time

Even the best-reviewed local company can be one accident away from bankruptcy. Protect yourself by demanding proof of three policies before you sign.

General Liability (GL) Insurance

Minimum acceptable: $1 million per occurrence and $2 million aggregate. Ask for the ACORD certificate dated within the last 30 days. Scan the “description of operations” box; it should list “driveway and flatwork.” If it only says “landscaping,” the carrier could deny a claim for concrete pouring.

Workers’ Compensation

In many states, sole proprietors with no employees can “opt out.” That saves them money but leaves you exposed. If a worker drops a plate compactor on his foot and the company has no comp, their attorney will look to your homeowner’s medical payments (and possibly sue). Require coverage even for small crews; the annual premium on a three-person team is usually under $3,000—peanuts compared with your liability.

Commercial Auto & Equipment

Personal auto policies exclude “business use.” If the contractor’s pickup dumps a load of gravel on the roadway and causes a multi-car accident, you want a commercial auto policy to respond, not your own umbrella. Look for combined single limits of at least $1 million.

Bonding vs. Insurance—Know the Difference

A license bond protects the public (you) if the contractor breaks state rules. A performance and payment bond protects the project by guaranteeing completion and paying unpaid suppliers. Bonds are not insurance; they simply give you a deeper pocket to pursue. Ask for both if the project exceeds $10k.

Insurance Considerations During Design & Permitting

Site Surveys & Utility Strikes

Miss a gas line and you could be liable for evacuating the neighborhood. Make sure the contractor’s GL specifically covers “underground utilities.” Better yet, add a 811 utility-locate contingency to the contract so the risk sits with the pros, not you.

Stormwater Runoff & Municipal Fines

Impervious surfaces can trigger new drainage requirements. If silt clogs a city storm drain and causes flooding downstream, the municipality may issue fines. Some GL policies exclude “pollution” or “fines and penalties.” Ask for a contractor’s pollution liability (CPL) rider or at least a broadened pollution endorsement.

Stay Protected While the Work Is Underway

Driveway Access & Pedestrian Safety

Post temporary “No Trespassing” signs and barricade open excavations. If a passer-by twists an ankle, your homeowner’s liability is the backstop—unless you can prove the contractor’s negligence. Take daily photos; they’re gold in subrogation claims.

Material Storage Theft

Sealcoating liquids, polymeric sand, and decorative pavers sell fast on Facebook Marketplace. Ask if the contractor’s inland-marine policy covers “property in the open.” If not, add a rider to your own homeowner’s or require locked containers overnight.

Weather Delays & Force Majeure

Summer thunderstorms can wash out freshly poured concrete. Most contracts shift weather risk to the homeowner unless language says otherwise. Negotiate a clause that any rework due to “ Acts of God” is covered by the contractor’s builder’s risk policy or at minimum their GL.

After the Project: Warranties, Endorsements & Claims

workmanship vs. Manufacturer Warranties

Asphalt contractors often give 1–2 year “seal and patch” guarantees; paver manufacturers may cover stones for life—but not labor. Read both documents and store PDFs in cloud backup. If the company folds, you’ll still have proof for a potential claim against their completed-operations insurance.

Increase Your Dwelling or “Other Structures” Limit

A $15k upgrade should trigger a policy review. Increasing “other structures” coverage from $20k to $40k usually costs less than $40 per year—cheap peace of mind.

Document Everything for Future Claims

1. Save the final invoice and payment receipts.
2. Take geo-tagged photos the day the crew pulls away.
3. Repeat photos annually; settlement cracks are easier to prove when you have a baseline.

How Much Does Extra Coverage Cost?

Below are ballpark premiums you can negotiate into the bid or purchase yourself.

• Contractor GL bump from $1 M to $2 M: $150–$300 for a one-month project.
• Homeowner “other structures” increase of $20 k: $30–$60 per year.
• Builder’s risk (material only) for 60 days: $200–$400 on a $15k driveway.
• Personal umbrella raising liability to $1 M: ~$175 per year.

Ask the contractor to itemize insurance costs in the bid; transparency keeps everyone honest.

Red Flags: When to Walk Away

• Certificate shows “NO COVERAGE” in the workers’ comp box.
• Policy expiration date falls in the middle of your project.
• Contractor can’t produce an ACORD form—only a photocopied “insurance letter.”
• Quote is 30% below everyone else with no line-item for insurance.
• High-pressure tactics: “Sign today or price goes up.”

Quick Homeowner Checklist

1. Call agent → confirm driveway coverage & limits.
2. Get fresh ACORD certificate → verify GL, workers’ comp, auto.
3. Check policy exclusions → utility strikes, pollution, workmanship.
4. Photo-document site before, during, after.
5. Store warranties & receipts in cloud.
6. Review limits annually; update if home value rises.

Frequently Asked Questions