The direct answer: the LHBA General Liability Trust is a group self-insurance fund where Louisiana home builders pool their money to cover general liability claims at cost, not for profit. Members typically share in surplus returns when claims run lower than expected. The Trust may also satisfy state contractor licensing insurance requirements.

Picture a Mandeville builder six months after closing on a new home. The homeowner calls about water intrusion around a second-floor window, and the drywall damage is already spreading. That builder now needs to know two things: whether the policy responds, and who pays. For many residential contractors around St. Tammany Parish, the answer runs through a coverage pool that most outsiders have never heard of.

The Trust gets passed around job sites by word of mouth. A framer mentions it to a GC, who hears about dividends from a fellow member. Few people can explain how the arrangement works, who qualifies, or where it falls short. This guide covers those questions, along with what to ask an agent before you sign.

Understanding the LHBA General Liability Trust

Aubert Insurance Agency has insured families and businesses in Covington, Slidell, and across St. Tammany Parish since 1910. Over that time, we've watched Louisiana's residential construction market go through hurricanes, carrier pullbacks, and repeated rewrites of licensing law. The LHBA General Liability Trust comes up often in conversations with builders because it was built for exactly that market.

The Trust is tied to the Louisiana Home Builders Association and serves Louisiana builders only. It is not a national program with a Louisiana endorsement attached. Its rules, underwriting, and loss control reflect local conditions: clay soils, coastal moisture, and a court system with its own habits around construction defect claims.

Risk Management Services, LLC handles daily operations, including underwriting, accounting, and loss control, from offices in Metairie and Baton Rouge. Governance sits with builders themselves. The 2026 executive committee includes Chairman Scott Wallace, Vice Chairman David Champagne, and Secretary Randy Noel. That matters because the people setting policy for the fund are contractors who face the same claims you do.

How the Pool Works for Louisiana Home Builders

A traditional insurance company sets a premium high enough to cover expected claims, overhead, and a profit margin for shareholders. A pool takes out the profit motive. The Trust operates as a Group Self-Insurance Fund that provides liability coverage at cost rather than for profit. Members pay contributions into a shared fund, and that fund pays claims and operating expenses.

When claims come in lower than projected, the surplus can return to members. The numbers here are real. As of December 31, 2024, the Trust reported an accumulated member distribution payable of $15,699,676 and more than $12.24 million in dividends paid out. Future dividends are never guaranteed, though, because they depend on how the pool performs.

Pooling also means shared accountability. One builder's sloppy subcontractor practices can raise costs for everyone, so the Trust expects good habits. Builders are required to verify subcontractor insurance through agents instead of trusting paper certificates. We've seen expired certificates handed over in good faith more times than we can count, so this rule protects members from a very common gap.

State law adds a safety floor as well. Louisiana's La. R.S. 22:458 requires self-insured trusts to keep at least $1 million in unimpaired net assets held in cash or government-guaranteed securities.

Eligibility Requirements for Joining the Trust

The Trust is a member benefit, so participation typically starts with membership in the home builders association. The LHBA's membership insurance programs page is the starting point for that connection. Beyond membership, underwriting looks at the builder as a risk.

Builders can generally expect these questions during review:

• Louisiana operations: The Trust serves contractors working in Louisiana, so your business and projects should be based here.
• Licensing status: Residential and home improvement contractors are typically reviewed against state license requirements.
• Type of work: Underwriters may ask about your mix of new construction, remodeling, and specialty work, since each carries different claim patterns.
• Loss history: Past claims, open lawsuits, and prior cancellations often affect acceptance and pricing.
• Subcontractor controls: Expect questions about how you verify and document subs' coverage.
• Payroll and receipts: Contributions are typically based on exposure measures like revenue or payroll.

Licensing also explains why the Trust draws so much interest right now. Effective in 2026, Louisiana Act 757 raised the mandatory general liability minimum for residential and home improvement contractors from $100,000 to $500,000. The Trust is a recognized vehicle for meeting licensing mandates under La. R.S. 37:2156.1(F) and La. R.S. 22:46(13)(d)(i). Even so, confirm that the limits you buy meet the current minimum for your license type.

Comparing the Trust to Traditional Commercial Insurance

Neither option wins in every case. A remodeler doing kitchen jobs and a production builder closing 40 homes a year can reach very different answers. The fund itself publishes a breakdown of self-insured fund vs. traditional carrier differences, and the table below gives the short version.

That last row matters more than people expect. A pool gives you one set of forms and one underwriting appetite. An independent agency can compare the Trust against several carriers side by side, which helps when your operation doesn't fit the pool's typical profile.

Questions to Ask Before You Join

Most coverage problems we see come down to assumptions nobody checked at signing. Bring these questions to your agent before you commit, and get the answers in writing where you can.

What are the coverage limits and exclusions?

Start with limits. Ask what the per-occurrence and aggregate limits are, and whether they satisfy the 2026 licensing minimum for your specific license. Then ask about exclusions, because that's where builders get hurt. Coverage for faulty workmanship may differ from coverage for the property damage that workmanship causes. EIFS, mold, subsidence, and work performed by uninsured subs are other areas where policies typically draw lines.

Get specific about completed operations coverage. Most builder claims show up after closing, sometimes years later, so you need to know how long that protection lasts and whether it continues if you leave the Trust. Ask about additional insured endorsements too, since lenders and developers often require them.

How does the claims process differ?

With a pool, claims are handled through the fund's administrator instead of a national carrier's claims department. Ask who your adjuster will be, how fast they typically respond, and how defense counsel gets chosen. Also ask how a large claim might affect your future contributions and your share of dividends.

A few more questions round things out:

• How are dividends calculated, and what happens to unpaid distributions if I leave?
• What notice will I get before cancellation or non-renewal? Under Act 182 (2025), effective July 1, 2026, insurers must give at least 60 days' written notice.
• What loss control steps are mandatory, and what happens if I miss one?
  

Common Questions About LHBA Coverage

Is the Trust actually insurance? It works like insurance, but it's structured as a self-insurance fund owned by its members. State law still regulates it, including minimum asset requirements.

Can I use the Trust to meet my contractor license requirement? Typically, yes. The Trust is recognized under the relevant licensing statutes, but you need limits that meet the current $500,000 minimum for residential and home improvement contractors.

Will I definitely get a dividend? No. Dividends depend on how the pool's claims and expenses perform, so past payouts don't promise future ones.

Do I have to be an LHBA member? In most cases, yes. The Trust is offered as an association member benefit.

Does it cover my subcontractors? Generally no. Your subs need their own coverage, and the Trust expects you to verify it through their agents, not with paper certificates.

What happens to my old projects if I switch away from the Trust? That depends on the policy terms for completed operations. Ask this before you join, not when you're leaving.

Making the Right Choice for Your Contracting Business

The LHBA General Liability Trust offers Louisiana builders something rare: liability coverage run at cost, governed by fellow contractors, and designed around this state's construction risks. Its dividend history is real, and it meets licensing requirements. Still, it is one program with one appetite, and it may not fit every operation or every budget.

The sensible move is to compare. At Aubert Insurance Agency, we look at the Trust next to multiple commercial carriers, then walk you through limits, exclusions, and completed operations terms in plain language. Our process is simple: you start online, we shop for you, and you pick the plan that fits your work. Whether you're building custom homes in Covington or remodeling in Slidell, you'll know what your policy says before a claim forces you to find out.