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What is general contractor liability insurance?

General contractor liability insurance is liability coverage that provides the financial supports for contractors who become obligated to pay to a third party on account of damage or injury that occurs in relation to the contractor’s work. Property damage, personal injury, or advertising injuries sustained by a third party can cost tens of thousands of dollars, and a legal settlement could cripple a contractor’s finances. This insurance is the protection against financial ruin, as the policy pays for damages that occur because of or during a contractor’s work on a project or property. Many clients require proof of this coverage before hiring a contractor.


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When do I need to be aware of general contractor liability insurance?

As a contractor, you may be required to carry a policy with a high enough coverage limit to satisfy a particular client. Inclusions address situations that take place at a storefront, at the site of a project, or verbal situations of slander or libel. Business insurance doesn’t fully address the scope of bodily injury liabilities, property damage, or reputational harm.

What is important to know about general contractor liability insurance?

Though it is called contractor liability insurance, the policy is written to afford protections to the contractor and those who work for the contracting company. Premium costs depend on the size of the business, the number of employees, the location, the claims history, the limits and deductibles, and the general assessment of risk vulnerabilities. There are some other important items you should know about general contractor liability insurance:

  • This type of policy does not cover the tools or property you own or use for your company.
  • This insurance can be secured by plumbers, developers, masons, handymen, home renovators, carpenters, security companies, or a number of other businesses working in the construction industry.
  • Most policies will start with coverage limits of one million dollars per occurrence with a two million dollar products and completed operations aggregate, though insurers may offer variations.