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General liability insurance for contractors and construction businesses
General liability insurance
General liability insurance covers common business risks like customer injury, customer property damage, and advertising injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.
General liability insurance covers common risks
From carpenters to general contractors, construction businesses and contractors face high risks.
General liability insurance offers basic protections by helping pay expenses related to third-party bodily injuries and property damage at your place of business.
A general liability insurance certificate also helps you meet the insurance requirements of contracts, leases, or professional licenses.
If a visitor is injured at your jobsite or property damage occurs during a renovation, for instance, general liability insurance can cover medical bills or the cost of repairs. This policy provides liability insurance coverage related to:
- Customer injuries
- Customer property damage
- Libel and slander
- Product liability
Below, find details on how general liability insurance protects your business.
Compare general liability insurance quotes for construction businesses and contractors
What can general liability insurance cover for construction businesses and contractors?
Customer injuries
If a customer trips over a tool box or a ladder while you’re doing electrical or carpentry work, you could be blamed for the injury. If the person sues, you could end up paying for medical and legal expenses. General liability insurance covers:
- Attorney fees
- Court-ordered judgments
- Settlements
- Medical bills
- Funeral expenses in fatal incidents
This policy does not cover employee injuries. For that, you’ll need to purchase workers’ compensation insurance.
Customer property damage
Accidents can be costly for builders and contractors. General liability insurance safeguards small businesses when client property is damaged.
For example, if a client’s furniture is damaged during remodeling, your general liability policy could help pay for the cost of repair or replacement. This policy can also cover the cost of a lawsuit if a client decides to take you to court over damaged property.
Libel and slander
While advertising your company and its construction services, it’s possible to inadvertently copy a competitor’s slogan or mimic another advertising campaign. Accidental advertising injuries are covered by general liability insurance, including:
- Copyright infringement
- Defamation, both libel (written) and slander (spoken)
Product liability
Construction businesses and contractors should make sure their contractor liability insurance includes product liability insurance, also known as products-completed operations coverage. This insurance protects your business when your finished work caused a bodily injury or property damage due to faulty workmanship.
For example, say a plumber installs a new sink in a kitchen. Two weeks later, the homeowner discovers the sink has leaked and damaged their expensive kitchen floor. This coverage would help pay the plumber's legal costs if the homeowner files a lawsuit over the faulty installation.
Add coverage for data breaches to your contractor insurance
Any construction company that handles sensitive information, including customers' credit cards, should invest in cyber liability insurance. Also called data breach insurance, this coverage helps businesses recover from a data breach or cyberattack. It can help pay for:
- Notifying affected customers
- Cyber extortion payments
- Credit monitoring services
- Data recovery
- Data breach investigations
Data breach costs can add up quickly, and a cyberattack could knock your business offline for a significant time. You can add this coverage to your general liability policy as an endorsement to gain financial protection against common cyber exposures.
How much does contractor general liability insurance cost?
Construction and contracting professionals pay a median of $69 per month for general liability insurance.
Insurance costs for construction companies and contractors are based on a few factors, including:
- Construction and contracting services offered
- Business revenue
- Location
- Claims history
- Policy limits and deductibles
Bundle insurance policies to save money and increase security
If you run a small construction business or are an independent contractor, you may be able to bundle general liability coverage with commercial property insurance in a business owner’s policy. A BOP offers more complete coverage at a lower cost than purchasing each policy separately. Businesses that are eligible for a BOP typically:
- Have fewer than 100 employees
- Have a small office or workplace
- Make less than $1 million in annual revenue
- Operate in a low-risk industry
- Need less than 12 months of business interruption insurance
Talk to a licensed Insureon agent to find out if your construction business is eligible.
Other types of business insurance for construction companies and contractors to consider
While commercial general liability insurance covers basic construction industry risks, it does not offer absolute protection. Other policies to consider include:
Workers’ compensation insurance: Workers’ comp covers medical costs for work-related injuries and illnesses. Most states require this coverage for businesses with employees.
Commercial auto insurance: This policy covers the cost of an accident involving your business vehicle. Almost every state requires this coverage for business-owned vehicles.
Contractor’s tools and equipment insurance: This form of inland marine insurance helps pay for the repair or replacement of a contractor’s tools and equipment if they are lost, stolen, or damaged.
Professional liability insurance: Also called errors and omissions insurance, this policy covers professional mistakes and oversights, such as a contractor missing a deadline for a project.
Surety bonds: These bonds reimburse your clients for financial losses if your company is unable to fulfill the terms of its contract.
Builder’s risk insurance: Builder’s risk insurance can pay for damage done to a structure still under construction, such as fire or vandalism at a construction site.
Get free quotes and buy online with Insureon
Are you ready to safeguard your construction or contracting business with a general liability insurance policy? Insureon helps contractors find insurance from top-rated insurance companies with one easy online application. Once you find the right policy, you can begin coverage and get a certificate of insurance in less than 24 hours.
Updated: January 5, 2023