Insurance and flipping

[William Joseph]

Here is the background:

I have a separate entity for my flips. It is a domestic Connecticut LLC and does nothing but hold the flip properties. There is an operating account to pay contractors and purchase materials and any other things you need to flip. In essence, the LLC is the GC. Naturally, for every property I buy I purchase a hazard and liability policy from my insurance agent for that specific property.

I am being told now that because this company flips that I need to purchase an additional general contracting policy in the event a subcontractor makes a mistake. I was pitched the doomsday scenario of an electrician not properly wiring something, house burns down after I sell it and I get sued. As a general rule, I use licensed guys for mechanical/electric/plumbing. It just seems crazy that I can be exposed to that liability for selling a used house (which buyer had the opportunity to inspect) and work was done by a licensed contractor. 

My question is the following:

(1) Does anyone else who has a flipping company pay this additional general contracting insurance? It seems redundant since in theory I have a liability policy for that specific property.