What Does General Contractors Insurance Cover?

Contractors insurance is a form of insurance that combines important coverages to combat the unique risks contractors face. Contractors are often subject to lawsuits and accidents unique to their profession, and thus need insurance to cover them.

General contractors insurance typically refers solely to general liability insurance geared for contractors. General liability insurance covers three main areas:

Bodily Injury: Bodily injury coverage under general liability covers third-party injuries caused by the contractor’s everyday operations. For example, if a client trips over a piece of equipment left out by the contractor and is injured, general liability will help with their medical expenses as well as cover the contractor for legal expenses that may follow.

Property Damage: Property damage coverage helps with replacement and repair costs for property damaged by the contractor, as well as legal expenses related to the incident.
Personal and Advertising Injury: Personal and advertising injury coverage covers claims regarding injury such as copyright infringement, libel, slander, theft of advertising ideas and more.

General Liability vs Professional Liability

General liability insurance covers acts of non-professional negligence. This means accidents that are not directly related to the specialized offered service. Professional liability, on the other hand, refers to mistakes a contractor makes that directly affect a client. Incidents like this are called professional negligence and are not covered under general liability insurance. It’s recommended that contractors purchase and maintain both of these policies.

Combining Policies for Contractors Insurance

A common way for contractors to combine coverages is through a business owners policy (BOP). A BOP combines general liability and commercial property coverage into a flexible policy for small businesses. Other coverages can be added to a BOP, as well, such as professional liability and:

Commercial Auto Insurance: Most contractors own or use vehicles to transfer equipment and travel between clients. Unfortunately, personal auto insurance won’t cover vehicles being used for work, even if the vehicle is primarily a personal one. Commercial auto insurance provides similar coverages for commercial vehicles.
Inland Marine Insurance: Inland marine insurance covers expensive items and equipment that is damaged or lost in transport.
Cyber Liability: With most information kept electronically, cyber liability insurance is vital for all businesses to protect against sensitive information damage or loss.
Equipment Breakdown Coverage: A large part of contracting work is the equipment used. In case expensive equipment breaks down, this coverage provides compensation for repairs and replacements.

What Does General Contractors Insurance Cover?

No Comments