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How Is Contractors General Liability Insurance Different From Standard Commercial Liability Insurance?


Any business needs general liability insurance. Contractors, subcontractors, and independent tradesmen need this type of coverage, not only to protect their business, but often as a requirement for the job. Trades that need contractors general liability insurance include construction, carpenters, plumbers, electricians, painters, and masons.

What Is Standard Commercial Liability Insurance?

Commercial general liability (CGL) insurance protects a business from financial loss due to liability for personal injury, property damage, or advertising injury caused by the services, operations, or employees of the business. It typically covers the costs of legal defense and damages, if you are found liable, up to policy limits. It can provide protection from:

  • Bodily injury or property damage liability claims: This type of claim can arise if someone suffers personal injury or property damage on your premises or through your business operations. This may include mental or emotional damage, even if no physical bodily harm was sustained.
  • Personal or advertising injury claims: These claims may involve libel, slander, copyright infringement, malicious prosecution, or false arrest.
  • Medical payments: This coverage can be triggered without a lawsuit being filed. It includes medical payments for non-employee injuries that occur on your premises or through your business operations. It allows you to promptly settle smaller medical claims without going through litigation. It covers all reasonable and necessary medical, hospital surgical, ambulance, nursing, or funeral expenses.

What Is Contractors General Liability Insurance?

Contractors general liability insurance provides the same basic types of coverage as standard commercial liability insurance. The difference is that contractors typically face a higher risk. This type of policy covers property damage and third-party injury. It can help protect your business in case a visitor is injured at your job site or you are held responsible for property damage that occurred during a job. It also covers advertising injuries. As a contractor, you need contractors insurance for protection against:

  • Customer property damage: Accidents happen, and they can be costly, for example, if a customer’s furniture, equipment, or building is damaged during a remodel. Contractors insurance can help cover the costs of repair or replacement.
  • Customer injury: Injuries are not uncommon on a construction site. If a customer trips and falls or is otherwise injured during a construction or remodeling project, your contractors general liability insurance can provide coverage for medical bills, attorney fees, settlements, judgments, and even funeral expenses, in the case of a fatal accident.
  • Advertising claims: It is possible to inadvertently advertise in a way that is too similar to a competitor’s advertising campaign. Copyright infringement, libel, slander, and other claims are typically covered by contractors insurance.

What Other Types of Insurance Coverage Do Contractors Need?

In addition to contractors general liability insurance, to be fully protected, you may need:

  • Workers’ compensation insurance
  • Commercial auto insurance
  • Professional liability insurance
  • Contractor’s tools and equipment insurance
  • Builder’s risk insurance

Our knowledgeable agent can advise you on the types of coverage you need and help you find it at the best available rates.

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