General liability insurance coverage for contractors and construction businesses

From carpenters to general contractors, construction businesses and contractors face high risks. General liability insurance helps pay expenses related to third-party injuries and property damage.

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 coverage related to:

• Customer injuries
• Customer property damage
• Libel and slander
• Product liability

Below, find details on how these coverages protect your business.

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.

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.

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)

Construction businesses and contractors should make sure their general liability policy 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.

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 to gain financial protection against common cyber risks.

If you run a small construction or contracting business, you may be able to bundle general liability insurance 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.

While general liability insurance covers basic construction and contracting risks, it does not offer absolute protection. Other policies to consider include:

Workers’ compensation insurance: Almost every state requires this coverage for construction businesses with employees. Even when it's not required, it's a wise investment as health insurance plans may deny claims for work-related injuries.

Commercial auto insurance: This policy covers vehicles owned by your construction or contracting business. It typically pays for accidents and damages related to theft, weather, and vandalism.

Contractor’s tools and equipment insurance: This policy helps pay for repair or replacement of a contractor’s tools and equipment if they are lost, stolen, or damaged.

Professional liability 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.

Are you ready to safeguard your construction or contracting business with general liability insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.