Contractors may face a variety of liability exposures arising from job site operations, subcontractor relationships, ongoing work activities, completed operations, and project-related responsibilities. Contractor’s general liability insurance is commonly reviewed to help address certain financial exposures involving bodily injury, property damage, personal injury, and other covered liability claims.
Construction operations can vary significantly depending on the trade, project scope, number of subcontractors involved, contractual insurance requirements, and the type of work being performed. Reviewing liability coverage periodically may help identify areas that deserve additional consideration based on operational activities and project requirements.
Contractor’s general liability policies can also vary depending on classifications, exclusions, endorsements, subcontractor conditions, completed operations provisions, and how the policy responds to the insurance requirements contained within the insurance sections of contracts.
Questions to Consider About Contractor’s General Liability Insurance
Operational & Job Site Exposures
• What types of construction or contracting operations are being performed
• Are multiple job sites, subcontractors, or specialized trades involved in operations
• Could ongoing operations or completed work create additional liability exposures
• Have changes in operations, revenues, payroll, or project size affected current insurance needs
Insurance Requirements Within Contracts
• Do project contracts require additional insured status
• Are waivers of subrogation or primary and non-contributory wording required
• Are aggregate limits required to apply on a per-project basis
• Have the insurance sections of contracts been reviewed carefully before work begins
Subcontractor Considerations
• Are subcontractors required to carry their own liability insurance
• Are subcontractor insurance requirements documented consistently
• Are there subcontractor exclusions, warranties, or limitations within the policy structure
• Could subcontractor operations create liability exposures that may affect the business
Coverage Structure & Additional Liability Considerations
• Are umbrella or excess liability coverages being considered as part of the overall liability structure
• Are contractors professional liability or construction management liability exposures being reviewed
• Are there exclusions, limitations, or endorsements that should be reviewed carefully
• Could pollution-related exposures or specialized operations require additional coverage considerations
Claims & Coverage Administration Considerations
• Have claims reporting procedures and carrier communication processes been reviewed carefully
• Are defense responsibilities and policy obligations understood within the policy structure
• Have carrier financial stability, claims handling practices, and coverage administration considerations been reviewed
• Are policy periods, classifications, and endorsements aligned with current operations and the insurance requirements contained within the insurance sections of contracts
Contractor’s general liability insurance is commonly reviewed based on operational exposures, the insurance requirements contained within the insurance sections of contracts, subcontractor relationships, and the potential financial impact associated with liability claims arising from construction activities. Coverage terms, conditions, exclusions, classifications, and endorsements may vary depending on the policy structure and carrier involved.
Cost of Insurance Considerations
Insurance costs for contractor’s general liability insurance can vary depending on annual revenues, payroll, trade classifications, project size, subcontractor cost, claims history, and the types of construction activities being performed.
Additional factors such as residential exposures, completed operations exposures, contractual insurance requirements, project locations, specialized trades, and subcontractor-related considerations may also influence underwriting considerations and overall insurance costs.
Coverage structures, deductibles, policy limits, endorsements, exclusions, and carrier requirements may vary depending on the nature of the operations and the insurance carrier involved. Reviewing operational activities and project exposure periodically may help identify changes that deserve additional consideration as the business evolves.
At Insurance With Purpose Agency, Inc., we work with contractors, subcontractors, developers, and construction-related businesses to review liability insurance options based on operational activities, contractual insurance requirements, and the broader structure of the insurance program.
If you would like to review how this coverage applies to your property insurance program: Dominique Renaud, Insurance With Purpose Agency, Inc.
