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WHAT CONTRACTORS INSURANCE DOES (AND DOESN'T) COVER

Updated: Apr 13


very digital photo of contractors meeting

We’ve said it before, and we’re back to reemphasize: contractors insurance is vital. But it isn’t the only piece to the protection puzzle.

Commercial general liability insurance––AKA contractors insurance––safeguards your company’s assets and reduces common risks. It’s also a required reassurance for customers who hire contractors and subcontractors across every sort of trade. But what exactly does this protective policy cover, and what falls outside its bounds? Let’s get into it.

What’s Covered by Contractors Insurance?


Call it contractors insurance or a construction general liability policy––either way this necessary policy will be instrumental to protecting your business against plenty of what ifs. Here are some key areas where a contractors policy is a real safeguard:

Property damage: If you or your employees cause damage to a customer’s property, your policy can cover the repairs.

Bodily injury: If negligence on your part causes injury to a third party (not you or your workers) then your contractor policy covers medical expenses and any court-awarded damages.

Product mishaps: If you’ve installed equipment that incurs damages to the client’s property, your policy will cover their losses.

Accidental advertising injuries: From copyright infringement due to a company slogan or advertising campaign to advertising that’s perceived as libel or slander, you might face a lawsuit for defamation––contractors insurance covers associated costs.

It’s clear just how protective a contractors policy is, but it can’t shield you and your company from every risk. Especially when it comes to employees and company property, there are some central areas that require extra protection.


Risks Not Covered by Contractors Insurance


Commercial general liability insurance provides coverage for basic contractor risks, but it does not offer complete protection. To fully shield your business, consider adding the following types of coverage to complement your business’s insurance package:


Workers’ compensation: This vital and often mandated coverage protects employees should they suffer work-related injuries by covering medical expenses and reimbursing a portion of any lost wages. Workers’ compensation will also protect employers from personal injury lawsuits.


Commercial auto: This insurance coverage is a must if your contracting business owns vehicles. Should you or your employee be involved in an accident in a company vehicle, this coverage compensates personal property damages and also protects against losses from theft, vandalism, and weather.


Builder’s risk: If fire, vandalism, or another covered peril happens while a project is still under construction, this policy compensates for covered losses.

Professional liability: Should you or your hired third-party provider miss a project deadline or encounter other professional oversights or mistakes, this coverage protects you from legal action and provides financial help to make things right.


Contractor’s tools and equipment: If your tools or equipment are lost, stolen, or damaged this insurance will help cover the cost of their repair or replacement.


The running theme here is that while contractors insurance does cover damages to clients’ or others’ property and protects your business from legal action, it can’t provide all the assurance you need to safely do business. Contractors insurance alone does not protect against employee injury or damage to your company’s property. Pairing a general liability policy with the above coverage options is the only way to know that you have a solid protection plan in place. Then you can operate with confidence, knowing that you can keep business moving, no matter what life brings.

Insurance Specialists with a Contractor’s Eye


General contractors and tradesmen of all types need to know that their insurance protection is as reliable as they are. And whether you're a landscape contractor, an excavator, you work in road construction or HVAC, reliability is key to your success. So while you're out there getting work done, Contractors by Zinc is here working just as hard to make sure that liabilities and common risks won't stand in your way. To learn more about coverage options or chat about your business’s needs, get in touch with us today!

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This blog post does not provide insurance advice and is intended for information purposes only. It is not a substitute for professional insurance advice from a licensed representative. Never ignore professional insurance advice because of something you have read in this blog post. Contact your licensed representative if you have any questions about your insurance policy.

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