General liability insurance
General liability insurance covers claims that your business caused bodily injury to someone else or damage to their property. For most contractors it is the first policy a client, property owner or general contractor asks to see.
- Bodily injury to others. Injuries to clients, visitors or the public caused by your operations, such as someone tripping over materials on a job site.
- Property damage to others. Damage to a client's or a neighbour's property caused by your work.
- Completed operations. Claims that arise after a job is finished and are traced back to your work.
- Personal and advertising injury. Claims of libel, slander or copyright infringement in your advertising.
- Medical payments. Minor medical bills for members of the public injured at your site, regardless of fault, up to a small limit.
- Legal defense. Defense costs for covered claims, in addition to or within the policy limits depending on the policy.
- Injuries to your own employees. Covered by workers' compensation.
- Your own tools and equipment. Covered by a tools and equipment (inland marine) policy.
- Vehicles. Covered by commercial auto.
- The cost of redoing your own faulty work. Generally excluded, although damage that faulty work causes to other property may be covered.
- Professional design errors. Covered by professional liability, for contractors who provide design services.
- Additional insured. Adding the client or general contractor to your policy for claims arising from your work for them.
- Limits. Many contracts ask for $1,000,000 per occurrence and $2,000,000 in the aggregate.
- Per-project aggregate. A separate aggregate limit for each project, so one job cannot use up the limit for all of them.
- Waiver of subrogation. Your insurer agrees not to seek recovery from the client after paying a claim.
- Primary and noncontributory. Your policy responds first, before the client's own insurance.
How much general liability do contractors need?
The amount is usually set by your contracts. Clients and general contractors commonly ask for $1,000,000 per occurrence and $2,000,000 in the aggregate. Higher requirements are usually met with an umbrella policy.
Does general liability cover my employees?
No. Injuries to your own employees are covered by workers' compensation, not general liability.
Is general liability required by law?
It is not required by law everywhere, but some states and municipalities require it for contractor licensing, registration or permits, and most clients require it by contract.
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