Home builders.....

I did a cost plus arrangement and the builder is requesting reimbursement of the General Liability Insurance. I have been very firm in asking for receipts on everything.....the response I got was this...

We are billed for general liability insurance once a year, at the end of the year. This amount was calculated by taking the total actual project cost and multiplying it by the rate of $0.008.

Total project cost: $100,000 $0.008 = $800 (changed this number)

Is this reasonable based on your incurred expense or what would you do in my shoes.

What does the contract say?

I've not encountered this personally but I'm in insurance and in our terms that would be $8 per $1000 if I've done the math right. Depending on what type of contractor he is and what class codes they're using that could be in line. Or at least not grossly out of line

Thanks contract is a little gray here (likely intentionally) - TX Association of Builders. The cost is buried in the line "on signing completing Punch List items to Owner's satisfaction and approval" of the Schedule of Estimated Construction Costs, but it doesn't explicitly state "General Liability Insurance".

I'm not necessarily arguing against it, I'm more verifying if that is a roughly reasonable calculation, which it sounds like it's not grossly overstated.

Does it have a cost stated or a calculation of it? If so, it probably doesn't matter what it's actually for, it's a stated cost as part of the contract.

It should have been in his markup unless otherwise stated in the contract

Yes, general liability insurance is a standard operating expense for a business even if Cost+
You are lucky to have such a builder.
PIM his 411 so I refer others in your area.

Hope he did good work
and you live in a joy forever

I carry GL as a pool builder. I usually figure 1% on cost plus projects.

That's about right - 1% of the contract all in. Thanks everyone for the feedback. It wasn't specifically called out as a line item in the contract, but it's in the estimate that's used to establish the draw requests, so it's valid. I said everything required an actual receipt / invoice, but not going to get nit picky here.