Essential reading for general contractors, specialty trades, and design-build firms working in Yavapai County.

What’s Changing in 2025?

Premiums jump 9–15 % on the completed-operations (CO) portion of general-liability (GL) policies.
New exclusions appear for wildfire smoke damage, expanded-soil movement, and multi-unit residential projects.
Higher limits demanded on contracts with HOAs and large custom-home GCs—many now ask for $2 M policy aggregates instead of $1 M.

Why the Sudden Focus on Completed-Ops?

Spike in construction-defect claims. Water-intrusion suits and soil-settlement disputes rose 26 % statewide in 2024.
Arizona’s strict liability landscape. The state’s eight-year statute of repose (A.R.S. 12-552) exposes builders long after project close-out.
Wildfire rebuild rush. Post-2022 Crooks & Goodwin Fires generated rapid builds—defect claims surface as homes settle.
Reinsurance hard market. Global treaties for construction liability renewed at +10 % in January 2025, forcing carrier price hikes.

Who Feels the Pinch?

Custom-home GCs building above 5,000 sq ft in the WUI—heightened exposure to wildfire-smoke infiltration claims.
Roofers & framers—carriers add separate CO aggregates for decking and fire-rated assemblies.
Subcontractors without written QC programs—lack of documentation triggers higher “severity modifiers.”

Where Are the Hidden Gaps?

Tract-home limitation endorsements. Many GL policies cap the number of units before a premium jump—check any “tract” definition if bidding multi-lot work.
Interior water-intrusion exclusions. Look for wording that removes coverage once roofing or siding is certified “complete.”
EIFS/Stucco carve-outs. Prescott’s dry climate still sees mold claims—verify if your carrier excludes synthetic stucco.

When Should You Review Coverage?

Before signing any subcontract or prime contract. Owner-written agreements often require CO coverage for up to 10 years.
90–120 days pre-renewal. Loss-run analysis and claim-prevention proof take time to influence rates.
Immediately after major safety or QC upgrades. Photo logs, third-party inspections, and drone-roof reports can qualify for mid-term credits.

How to Control Costs Without Sacrificing Protection

Create a documented QC plan. Include moisture-barrier photos, pre-pour soil reports, and roof-deck inspections.
Bundle GL with project-specific excess limits. A $2 M excess layer often prices cheaper than pushing primary CO limits higher.
Negotiate “per-project aggregate” wording. Prevents a single claim from eating the annual CO limit across multiple jobs.
Use insured subcontractors. Require equal or higher CO limits and keep certificates up to date; carrier audits bill you for uncovered subs.
Add a disciplined “warranty walk-back” schedule. Regular post-completion inspections catch issues early—insurers reward proactive defect management.

Key Take-Aways for Prescott Contractors

Completed-ops pricing is rising faster than material costs—plan for double-digit increases through 2026.
Contract requirements drive limits. Read the fine print before accepting a job that mandates 10-year CO coverage or higher aggregates.
Loss-control documentation (QC photos, soil tests, water-barrier certifications) is your best leverage for lower rates.

Sources

Not sure if your policy still meets 2025 contract specs? Inszone’s Prescott construction team can review your completed-operations wording and find cost-effective solutions before bid season.

Prescott Builders: Completed-Operations Insurance Is Tightening—What Should Every Contractor Check Before Signing a 2025 Contract?