General liability insurance coverage 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 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 injuries
Customer property damage
Libel and slander
Product liability
Below, find details on how these coverages protect your business.
Customer injuries
If a customer trips over a toolbox 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)
Product liability insurance
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 will help pay the plumber's legal costs if the homeowner files a lawsuit over the faulty installation.
Add coverage for data breaches to your policy
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.
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
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