Contractor Insurance FAQs

Contractor General Liability insurance protects general contractors against lawsuits or claims arising from property damage and bodily injury that may occur on a construction job. The insurance covers construction areas and projects under the care, custody and control of the general contractor. The insurance covers claims and judgment or settlement costs that may occur during the project, as well as after the project is completed.

General liability insurance covers the cost of lawsuits brought on by third parties over bodily injury or property damage caused by one of the employees, or the business itself. This type of insurance covers legal fees, settlement costs and damages, regardless of whether you’re found liable. These policies cover: property damage, client and third-party injuries, reputational injuries, problems with construction or installation (completed products).

Completed products coverage is an addition to general liability coverage. This type of insurance covers damages over repair costs, deterioration or other financial losses for a client or third party that could result in a lawsuit for your failure to deliver as promised. General liability with completed products coverage isn’t the only type of insurance you need for your construction or contracting business, but it does include many of the biggest and most expensive risks your business could face.

You can get Contractors Liability (Commercial General Liability) through most insurance brokers who sell commercial insurance. If you have more questions or would like to get your policy started today give Armour Insurance a call at 1-855-475-0959 or start your contractor insurance quote here.  

Contractor liability insurance is needed primarily by the general contractor. However, subcontractors should also maintain their own coverage. If the subcontractor does not have insurance of their own, the general contractor will be liable for damages caused by their subcontractors.

Construction companies and contractors often use subcontractors to complete portions of the work. The contractor is the leader hired to complete a project, and the employees that are hired to complete or expedite a project are the subcontractors. These are not long-term employees, but employees who are hired for short-term work and have a temporary working relationship throughout the course of the project.

If one of your subcontractors causes damage to your project or the business and they don’t have the proper coverage, you could end up liable. That said, you may not need to provide liability insurance for your subcontractors, provided they are covered by a different liability policy.

Ultimately, you still need to be sure that everyone responsible for your project is properly covered. In these cases, you can either require all your subcontractors to have their own insurance coverage, or you can add subcontractors to your general liability insurance or contractor’s liability insurance.

For most, the best option is to ensure that any of your subcontractors carry their own liability insurance. This is common practice and should be included in the contract, but you should still check their certificate of liability insurance to be sure that it’s adequate and current. It’s not always feasible to have subcontractors with their own liability coverage, however. If this happens, you can add them as “additional insured” on your existing policy. With this option, you’re only covering the work they do under your contract, so you won’t be liable if they have damages elsewhere. In either case, be sure to discuss your insurance requirements with your subcontractor prior to hiring them.

COC policies cover buildings under construction or major renovations. Your COC protects:

• The building project
• Materials that become part of the project while on site
• Materials transported to the site
• Installation floater coverage (preassembled components before they are brought to the project)

Examples of perils insured by your COC: fire, lightning, windstorm, hail, vandalism, theft. For more information, visit our Course of Construction page.

Surety is a completely different concept from insurance. Surety is more likened to a financial guarantee than anything else - being essentially a credit service similar to a co-signed note from a bank.

For more information on surety bonds, you van visit our webpage.