Contractors, are you tired of trying to get on a job only to hear that you need insurance, or the insurance you have does not provide the correct wording, or that it is going to cost more to get the endorsements that you need? We have an Additional Insured Department with many full-time people to get your clients the certificates and endorsements you need to get on a job and get paid.
General liability for contractors is the foundation of a strong insurance defense. One of the biggest risks in the construction industry is third-party injuries, and some of the most costly claims you could face as a construction professional come from construction defect claims and lawsuits for property damage, medical bills, or accidents.
Contractor General Liability: Protection for Your Construction Business
General liability is designed to protect construction professionals against third-party claims and lawsuits, including:
Bodily Injury Claims
Medical Expenses
Completed Product Claims
Property Damage Claims
Personal and Advertising Injury Claims
General liability insurance gives you the peace-of-mind that your business assets are protected. If a third-party alleges property damage, injury, or bodily harm, you won’t have to worry about your construction business assets being depleted by medical bills, court costs, settlements, or judgements.
In the high-risk construction industry, safety and protection are part of the job. General liability insurance is one way you can protect your business and keep your assets where you want them. You work hard to build your business. General liability insurance works hard to protect it.
Commercial General Liability Insurance (CGL) is designed to defend lawsuits and pay damages relating to bodily injury and property damage to others arising out of the insured’s work. I say “to others” because if it is bodily injury to an employee, then you would find coverage under Workers' Compensation Insurance. If there was property damage to the insured, then the insured needs to have property insurance. The CGL policy is designed not to cover damage or injury to the insured’s property or employees, but to help defend and pay damages to a third party if the insured causes bodily injury or property damage to someone else.
The occurrence limit is the most that the policy will pay for any one event. The aggregate limit is the most that the policy will pay no matter how many events happen. For example, if you have an occurrence limit of $1 Million and an aggregate limit of $2 Million, you could have two $1 Million covered occurrences. If you have a third $1 Million occurrence or if you have a single occurrence worth $2 Million, you would not have enough coverage because the most that the policy would pay for any one occurrence would be $1 Million and once the policy has paid the total aggregate of $2 Million, there is no more money available to defend or pay damages. Please ask me about umbrella and excess policies if you need to protect your business for an amount greater than your CGL’s occurrence or aggregate limit. If you have an umbrella/excess policy in place over your CGL, it will drop down and pay for occurrences when your CGL policy’s limits are exhausted or pay in excess of your CGL limits if you have an occurrence worth more than your occurrence limit.
What is the Medical Payments Limit? Some clients want to know why the limit for “Medical Payments” is so low. For example, it is common to see a limit of $1 Million for the occurrence limit, and a limit of only $5,000 for Medical Payments. The first place to start when thinking about the Medical Payments Limit is to remember that the occurrence limit pays for bodily injury and property damage to others arising out of the insured’s work. This means that you have a full $1 Million in this example for bodily injury and so the medical payment limit of $5,000 must be talking about something other than just bodily injury. The medical payment limit is an amount available per claimant for first aid and as goodwill to prevent a larger claim. For example, if someone slips and falls at your job site, the insurance company might think it is cheapest just to spend up to the medical payment limit to resolve the issue quickly. If the person requires more care than the medical limit can provide, then the claimant can always file a claim against the occurrence limit. The difference is that with medical payments, there is no “finding of fault.” On the other hand, the insurance company will only pay for bodily injury out of the occurrence limit if there is a finding of fault that determines that you, the insured, are at fault. With medical payments, the insurance company is not going to investigate whether you or the injured party is at fault. If there is an injury on your premises or jobsite and first aid is needed, the medical payments limit is there to help.
For more details on Contractors and the CGL Policy, please click here to read an article that an attorney friend and colleague wrote for The Insurance Journal entitled, Contractors and the CGL Policy’s “Your Product” and “Your Work” Exclusions.
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