What Contractors Need from a General Liability Policy

What Contractors Need from a GL Policy

For many contractors, General Liability insurance is something they know they need but not always something they fully understand. For agents, it’s one of the most common coverages placed for small construction and trade businesses.

At its core, a General Liability (GL) policy is designed to protect a contractor’s business when everyday work leads to unexpected damage to others or their property, injury, or legal costs.

Why General Liability Is Essential for Contractors

Contractors are in the business of fixing things. In this process, sometimes unexpected events occur - like spilling paint on a new carpet or TVs falling off the wall. Sometimes, these events are even bigger - like hitting a water line in a home, or injuring someone.

General Liability insurance helps protect contractors from:

• Third-party bodily injury claims (You hurt someone)
• Third-party property damage (You damage something)
• Legal defense costs related to covered claims

In many cases, GL coverage is also required to:

• Secure permits
• Sign contracts
• Work with property owners, general contractors, or municipalities
• Get approved to work on a contractor marketplace

Many homeowners, business owners, and corporations will only work with contractors who carry valid insurance.

Real-World Claim Examples Contractors Face

To understand what General Liability does, it helps to look at common scenarios contractors encounter.

Example 1: Property DamageA flooring contractor damages a client’s hardwood floors while moving equipment. The cost to repair or replace the flooring is significant as the flooring materials were imported from Turkey. A GL policy can help cover the property damage and associated legal expenses.

Example 2: Third-Party InjuryA homeowner trips over some materials left out by a painter they hired and is injured. Medical costs and potential legal claims can quickly add up. General Liability coverage may help respond to these expenses.

Example 3: Damage After Work Is CompletedAn electrician completes a job, but weeks later, a faulty wiring connection causes damage to the client’s property. Even after the job is finished, a GL policy can help address certain claims related to completed operations.

What Contractors Look For in a GL Policy

While policies can be complex, most contractors focus on a few practical needs.

Coverage That Matches the Work Being Done

Not all contractor work is the same. A GL policy should reflect the actual operations of the business, whether that’s carpentry, electrical work, painting, or another trade. You should look for an insurance company that can review all operations and provide coverage for multiple operations if that’s what you offer in your business.

Clear underwriting questions help ensure the coverage aligns with the work being performed and reduces the risk of uncovered claims. These also will produce work exclusions that agents and contractors can review to ensure there isn’t an exclusion for a service the contractor provides.

Limits That Meet Real-World Requirements

Many contractors encounter minimum insurance limits set by:

• Clients
• Property managers
• General contractors
• Contractor Marketplaces

Bring these requirements to an insurance agent who will suggest an insurance company that meets these needs. Once the policy is in place, the agent will give you a Certificate of Insurance (often referred to as a COI) which is used by you to show a third party that you have valid insurance.

Admitted Coverage

Some contracts and jurisdictions require coverage to be written on admitted paper. Even when it’s not required, admitted coverage can provide peace of mind for contractors and the businesses they work with.

Foxquilt’s products are an admitted offering, carry an A AM Best rating.

Proof of Insurance Without Delays

Contractors often need proof of insurance quickly to start or continue work. Delays in providing correct certificates can mean lost jobs or postponed projects.

Efficient policy issuance and certificate access are a key part of a contractor-friendly GL policy.

Clear Expectations Around Claims

You don’t want a claim to happen, but when they do, clarity matters. Knowing how to report a claim and what to expect from the process helps reduce stress during an already difficult situation. Typically, where you report a claim is included on your policy documents.

Common Misunderstandings About GL Coverage

Misunderstandings about General Liability can lead to surprises later.

Common misconceptions include:

• Believing GL covers faulty workmanship in all cases
• Assuming GL replaces Professional Liability or Errors and Omissions coverage
• Thinking coverage ends once a job is complete

Remember: General Liability coverage is for damage or injury to someone or something.

How General Liability Fits Into the Bigger Picture

For contractors, GL insurance is one part of a broader risk management approach. It works alongside:

• Workers’ compensation
• Commercial auto insurance
• Professional liability or E&O coverage, where applicable

Understanding how GL fits within this larger picture helps contractors make informed decisions about their insurance needs. Learn more about other coverages contractors may need.

A Simple Takeaway

Contractors need General Liability coverage that reflects the work they actually do, meets contract requirements, and responds when accidents happen. For agents and contractors alike, the value of a GL policy comes down to clarity, responsiveness, and reliability.

A well-structured GL policy helps contractors focus on their work - knowing they have protection when the unexpected occurs.

If you're a contractor looking for tailored, affordable, and digital General Liability with streamlined certificates, look no further than Foxquilt. Get started at http://join.foxquilt.com today.

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