Contractor General Liability Insurance (CGL) is a comprehensive coverage designed to protect you from potential liabilities arising from accidents, injuries, or property damage during the course of your construction projects. 

In California, where construction activity never sleeps, contractors general liability insurance acts as a safety net for you, ensuring that you can focus on your construction jobs and building your business without the constant worry of legal and financial setbacks.

What Can a GL Policy Cover?*

  1. Bodily Injury and Property Damage: Contractor's general liability insurance covers medical expenses and legal costs associated with bodily injuries sustained by third parties at the construction site. It also encompasses property damage caused by the contractor's operations.
  2. Completed Operations: Even after a project is completed, there can be instances of defects or issues arising. Contractor's general liability insurance provides coverage for claims arising from completed operations.
  3. Products Liability: If a contractor's work involves the production or distribution of products, this coverage protects against claims related to defects or malfunctions in those products.
  4. Personal and Advertising Injury: This aspect of contractor's general liability insurance safeguards against claims of libel, slander, or copyright infringement, which can emerge from advertising or promotional activities.
  5. Legal Defense Costs: Beyond the coverage limits, contractor's general liability insurance also includes legal defense costs, including attorney fees, court expenses, and settlements.

Why Do Contractors Need a General Liability Policy?

  1. Risk Mitigation: The construction industry is inherently risky, with potential for accidents, property damage, or injuries. A general liability policy provides a safety net, helping contractors mitigate financial losses resulting from unexpected events.
  2. Contractual Obligations: Many clients and project owners require contractors to have a general liability policy before entering into a contract. It assures clients that you are financially protected to handle liabilities that may arise during the project.
  3. Legal Requirements: In some states and municipalities, contractors are legally obligated to carry a certain level of liability insurance. Compliance with these requirements is essential to avoid penalties and legal issues.
  4. Professional Reputation: Being adequately insured enhances your professional image. Clients are more likely to trust and hire a contractor who is prepared for potential mishaps and has the means to address any resulting liabilities.
  5. Financial Protection: A single liability claim, even if groundless, can lead to substantial legal costs. Without insurance, you could face financial strain due to legal expenses and potential settlements or judgments.
  6. Peace of Mind: You can focus on their work with confidence, knowing that they have a safety net in place. This peace of mind allows them to concentrate on delivering quality projects rather than worrying about potential liabilities.
  7. Coverage Beyond the Job Site: Contractor's general liability insurance policies often provide coverage beyond your physical location. This means that if your work leads to liabilities off-site, they can still be protected.

How Much Does a GL Policy Cost?

The price range for a contractor general liability coverage can dramatically range based on factors such as the contractor's classification, payroll, subcontractor expenses, gross receipts, and geographical location. Additionally, the policy's coverage limits can impact its price. A common misconception among contractors is that there is usually a significant price difference between a policy with a $1 million aggregate limit and one with a $2 million limit. However, in reality, most of time the price difference is less than $100. That being said, in rarer instances, there can be more than a $500 difference in price, but that's typically when a significant increase in aggregate limit is requested. Most external parties that require contractors to possess general liability coverage seek a $2 million aggregate coverage limit for project involvement.

A general liability policy is a vital tool for you and business’s health, providing comprehensive coverage against a wide range of risks and liabilities. Its importance extends beyond legal requirements; it safeguards financial well-being, professional reputation, and the smooth execution of projects. By investing in a general liability policy, you can navigate the complexities of the construction industry with greater confidence and security.

Get your contractor's general liability policy today: 

*NOTE: Please review the policy terms and consult your insurance professional for coverage details. The terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.