General liability insurance for contractors (GL or CGL) helps protect construction businesses from third-party claims, like
- Bodily Injury
- Property Damage
- Personal/Advertising Injury
that arise from your operations, premises, or completed work.
Many owners and GCs require it in contracts before anyone steps on site
Let’s explore the scope of general liability insurance specifically for construction contractors and unpack the essential nature of this coverage.
What Is General Liability Insurance for Contractors?
What is contractor general liability insurance?
Commercial General Liability (CGL) is the standard form that pays covered damages and defense costs when you’re legally liable for third-party injury or property damage (Coverage A) and certain personal & advertising injury offenses (Coverage B).
Policies also include Medical Payments for minor third-party injuries, typically regardless of fault. Office of General ServicesIRMI
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The Scope of General Liability Insurance Coverage for Contractors
General liability typically includes several key components, each designed to protect against specific types of risks that are prevalent in the construction industry:
1. Bodily injury liability
This aspect of the coverage addresses situations where a third party, such as a visitor or client, is injured on the job site. It covers medical expenses, legal fees, and settlements. For example, if a visitor trips over construction materials and sustains injuries, the general liability insurance will cover their medical bills and any legal actions that may arise from the incident.
2. Property damage liability
This component protects contractors from financial loss if their work inadvertently damages a client’s property. Whether it’s accidentally breaking a window or causing structural damage during renovations, general liability insurance will cover the costs associated with repairs or replacements so that the contractor doesn’t have to bear these expenses out of pocket.
3. Personal and advertising injury
Personal and advertising injury coverage is a type of insurance that safeguards businesses against legal claims stemming from their advertising activities and relationships with others.
4. Medical payments
This part of the insurance provides immediate coverage for minor injuries sustained by third parties on the job site, regardless of who is at fault. It secures quick payment for medical expenses, which can help prevent more significant legal disputes. For example, if a delivery person gets a minor injury while delivering materials to the site, the general liability insurance will cover their medical costs promptly.
5. Products-completed operations coverage
This crucial component covers liabilities that arise after a project has been completed. If a defect in the completed work causes injury or property damage, this coverage will handle the associated costs. For example, if a contractor finishes a renovation and later, due to faulty work, a ceiling collapses and injures someone, the products-completed operations coverage will cover the medical and legal expenses. This verifies that contractors are protected from claims even after the job is done.
Products–Completed Operations (don’t skip this)
Construction risk doesn’t end at punch-out.
If a defect in your completed work later causes injury or damage, products–completed operations may apply (subject to terms and exclusions).
It’s a core reason owners/GCs insist on CGL and additional insured status.
Why Liability Insurance Is Essential for Construction Work
The construction industry inherently comes with risk, ranking second in terms of workplace deaths, including numerous opportunities for accidents and errors. Without general liability coverage, contractors expose themselves to significant financial risks that could potentially bankrupt their business.
Investing in liability insurance for construction projects protects contractors from financial loss and enhances their credibility with clients and partners. Clients are more likely to trust and hire contractors who demonstrate responsibility and foresight by securing appropriate insurance coverage.
Many construction contracts require contractors to have general liability insurance as a prerequisite for work. It gives contractors the ability to minimize the risks associated with their work and concentrate on delivering high-quality projects to their clients. For any construction business, comprehensive general liability insurance coverage for contractors is a wise investment, but more than that, it’s a necessity.
For more information about general liability insurance or to get a free quote, contact Affordable Contractors Insurance. We are here for you.
What CGL doesn’t cover (common gaps)
- Your work (faulty workmanship) is generally excluded—with an important subcontractor exception in many standard forms. Know how your policy treats the “damage to your work” exclusion and endorsements. IRMI+2IRMI+2
- Professional services (design, engineering, means & methods advice) are typically excluded—consider Contractors Professional Liability. IRMI+2IRMI+2
- Employee injuries (that’s Workers’ Comp) and auto accidents (Commercial Auto) are separate policies. Travelers
Frequently Asked Questions
Q: Is general liability required by law for contractors?
General liability isn’t usually mandated by statute like workers’ comp, but it’s commonly required by owners and general contractors in construction contracts and is considered essential risk transfer. Always review each contract’s insurance requirements before starting work.
Q: Does CGL cover employee injuries?
No. Workers’ compensation covers employee injuries and illnesses. Commercial General Liability (CGL) addresses third-party bodily injury or property damage claims, not injuries to your own employees.
Q: Will CGL pay for my own faulty workmanship?
Typically no—this is excluded under the “your work” exclusion. Some policies include a subcontractor exception that may restore coverage when damage results from a subcontractor’s work. Review your policy and endorsements to confirm how this is handled.
Q: What is “personal & advertising injury”?
It’s coverage for specified offenses such as libel, slander, invasion of privacy, and certain copyright or slogan infringements in your advertising. Exact definitions and limitations are set by your policy wording.
Q: Why do owners want “additional insured,” “primary & noncontributory,” and “completed operations”?
They want your policy to defend and indemnify them for liability arising out of your work (additional insured), to have your policy respond first without contribution from theirs (primary & noncontributory), and to extend protection for claims that arise after the job is finished (completed operations).