You take pride in your work, never cut corners, and strive for perfection in every project. But sometimes things don't always go right: an improper installation, a defective product, or a clumsy mishap that results in damage. If something does go wrong in your work, you may find yourself asking:
Is faulty workmanship covered under your general liability policy?
General Liability and Faulty Workmanship: Covered or Not?
The overall purpose of a general liability policy is to pay if you are legally liable for damages because of bodily injury or property damage caused by an occurrence.
The purpose of the liability policy is to protect you from an accidental occurrence that leads to property damage, and not to protect contractors who decided to perform less-than quality work.
Which is why -- in the past-- most contractor generally liability (also known as CGL) policies have been written with certain exclusions in place that prevent faulty workmanship from being covered.
Common CGL exclusions against faulty workmanship include:
Damage to Property
A clause that excludes property damage that takes place while the named you (or your subcontractor) is in the process of performing work. For example, if you were performing work on a roof, and accidentally damaged the roof with a scissor lift, the property damage would not be covered because you were performing work on that part of the real property (the roof).
This clause also excludes property damage that must be fixed because your work was improperly performed. Like if you were installing flooring, and discovered halfway through the project that you had installed the wrong wood. The cost to rip it up, start over, and repair damage to the subflooring is excluded by your CGL policy.
Damage to Your Work
A clause that excludes coverage for property damage resulting from defective workmanship, including completed work that damages itself, or property that must be restored, repaired, or replaced because work was incorrectly performed on it.
If a cabinet was installed incorrectly, coming loose and damaging the wall it’s attached to, the Your Work exclusion would mean the cost of repairing the wall and re-installing the cabinet isn’t covered by your CGL policy. When damage is a result of completed work performed by you and/or your employees, you could be left paying for the mistake.
General Liability Insurance Now Offers Contractors Added Coverage for Workmanship Claims
Citizens General can now offer contractors a new option to protect themselves from faulty workmanship claims. We have a unique endorsement available for contractors which adds Contractors Faulty Workmanship Coverage to a CGL policy.
When you add Faulty Workmanship coverage to your CGL policy, you can protect yourself and your clients against claims arising out of faulty workmanship, materials, and products that would normally be excluded in your policy. The endorsement offers $10,000 worth of coverage at an extremely affordable cost.
Two Times Faulty Workmanship Coverage Saved the Day
Here are a few real-life contractors who benefitted from adding this endorsement to their CGL policy.
“Rick” is a paving contractor who was hired to cover a parking lot with asphalt. After the surface appeared to be crumbling two months after installation, the client filed a claim. Luckily, Rick had Faulty Workmanship Coverage added to his general liability policy, otherwise the claim would have been denied. The endorsement provided $10,000 for the claim that Rick would normally have had to pay himself.
“John” is an electrical contractor who was hired to install security cameras. An improper installation led to water damage to the equipment. Since John had added the endorsement to his CGL policy, he received $10,000 in damages he would have otherwise been responsible for paying.
You can increase the protection of your CGL policy by adding the Faulty Workmanship endorsement that is now available. Want to know more? Contact your Citizens General insurance specialist and find out how this specialized endorsement can benefit you.