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General liability insurance coverage for contractors and construction businesses

General liability insurance icon
General liability insurance

General liability insurance covers common small business risks like customer injury, customer property damage, and advertising injury. It protects your business during lawsuits and helps you qualify for leases and contracts.

General liability covers common risks

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 injury
  • Customer property damage
  • Libel and slander
  • Products-completed operations

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

Customer injury

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.

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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)

Products-completed operations

Products-completed operations coverage protects your business when your finished work caused a bodily injury or property damage due to faulty workmanship.

For example, a plumber installs a new sink in a kitchen. Two weeks later, the homeowner discovers the sink has leaked and damaged the expensive kitchen flooring. This coverage would protect the plumber from the homeowner's lawsuit over the faulty installation.

Bundle insurance policies to save money and increase security

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.

Other policies for construction businesses and contractors to consider

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

Workers’ compensation insurance: Required in almost every state for construction businesses with employees, workers’ comp can cover medical fees 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.

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 compare policies with Insureon

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.

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