Construction is a high-risk industry. Which means insurance protection is a must-have for construction professionals who want to protect themselves from the high cost of an accident, injury, or other unexpected event. So where do you start? General liability insurance for contractors is a foundational policy that will protect you from the biggest risks you face in the construction industry, and the perfect place to build from if you need additional coverage.
Here’s what you need to know about general liability insurance for contractors and construction professionals.
What Does General Liability for Contractors Cover?
The easiest way to remember what general liability (GL) covers is to think about other people. Generally speaking, GL is there to cover third-party injuries and damages. That may be your client, a stranger, or a passerby. Here are the types of scenarios and claims that you could face in your construction profession, and how GL coverage applies.
You’re a painting contractor who has just climbed down from a ladder to open a new can of Benjamin Moore White Dove that you’re applying to a client’s interior walls and ceiling. Just as you crack that lid off, the client’s teenager walks into the room, head down and eyes fixated on the iPhone in his hand. He walks right into the ladder, which proceeds to fall down on top of the dazed teen. He’s cracked his head, sprained an ankle, and worse yet, his parents are fuming. At you.
General liability insurance is there to cover third-party injuries and medical bills for these types of situations. So when an angry client expects you to pay up for the ambulance that escorted their distracted texting-and-walking teen to the hospital, the three stitches to his forehead, and the walking boot to cradle his sprained ankle, you’re covered.
But that’s not all.
Third-party Property Damage
You’re an excavating subcontractor and one of your employees is operating your backhoe loader. Your employee forgets to take the transmission out of drive, and even though the outriggers are down, the tires are still in contact with the ground. With the seat turned around so he can dig, your worker hits the throttle and the backhoe takes off -- crashing through the front of a neighboring home. Luckily, no one was hurt. Unfortunately, the home, yard, and your worker are all a bit worse for wear.
Having your employee accidentally drive heavy equipment right through someone’s home? It could be worse. Because if you’ve got GL coverage, you’re protected from the out-of-pocket costs of repairs to the home, yard, and furniture that was damaged in the incident.
You may not realize it, but there’s a lot to consider when it comes to marketing your business in today’s digital world. Websites, blogs, and social media accounts are all ripe opportunities to get your business in trouble with copyright infringement, slander, or libel issues.
So when you take to Twitter to proclaim that a competitor’s work, attitude, and rates are all “Bad! Bad!” -- or if you’re just grabbing images off of Google search results to put up on your website -- beware. These kinds of actions could result in a lawsuit that could cost your contracting business big.
If you’ve inadvertently used a business name and log that is a bit too similar to someone else’s, or you’ve been copying other people’s blog posts or images and posting them to your website without attribution, it could land you in the middle of a courtroom trying to defend your actions.
And whether you’re found guilty or not, any lawsuit can quickly get expensive as court costs, legal fees, and lawyer’s fees begin to add up.
General liability insurance can protect contractors by covering against advertising injuries, including:
- Copyright infringement (using someone else’s works like blog posts, images, logos, or business name in an advertisement)
- Slander (oral defamation: speaking an untruth that may damage someone’s reputation)
- Libel (written defamation: writing/ publishing an untruth that may damage someone’s reputation)
Contractor General Liability - A Quick Summary
General liability generally covers the cost of repairs, medical bills, legal fees, settlements and judgements that arise out of third-party injuries, property damage, or advertising injuries as a result of you operating or conducting your business or profession.
What Doesn’t GL Cover for Contractors?
While general liability covers many of the risks you may face while doing your job, it’s not a catch-all policy. There are many things that GL won’t cover, such as:
- Stolen/ lost tools and equipment
- Injuries to yourself or employees
- Intentional third-party damage
- Damage to a project during construction
Contractors and construction professionals have a highly desirable set of skills, and the construction industry is great place to build and grow a successful career. And building that career means protecting yourself from the very likely risk that something could go wrong on (or off) a project site. When you have the right liability insurance protection, however, one small misstep won’t mean you have to hang up your tools for good.