What Does CGL Insurance Cover for Contractors?

Whether you're a general contractor, contractor, or sub-contractor. Commercial General Liability (CGL) insurance can protect your business from claims for bodily injury or property damage. Legal defense costs resulting from a covered claim are also included in your CGL policy.

CGL insurance helps to cover the following types of claims caused by your business.

• Bodily Injury:
  An injury to a third party

• Property Damage:
  Damage to a third-party's property

• Personal and Advertising Injury:
  Personal injury, such as libel and slander, and advertising injury such as copyright or trademark infringement

The coverage may also extend to a contractor's liability for their completed projects.

To help ensure you are fully protected, consider the following types of insurance:

• Business income:
  Provides protection for lost net income; mortgage, rent, and lease payments; loan payments; taxes; and employee payroll. Requires that the damages be caused by a covered loss resulting in physical damage to the property.

• Businessowners policy (BOP):
  A policy that combines property, liability, and business interruption coverages for small- to medium-sized businesses. Coverage is generally less expensive than if purchased through separate insurance policies. A BOP may also provide coverage for your tools and small equipment.

• Commercial auto:
  You need a vehicle to transport your tools and equipment to jobsites. Commercial auto insurance covers the cost to repair or replace vehicles (less depreciation) in the event of an accident, as well as the cost to rent a replacement auto so that your contractor business can continue operating.

• Commercial general liability (CGL):
  Insures against the liability exposures of many businesses. Coverage includes product liability, completed operations, premises and operations, and independent contractors.

• Commercial umbrella:
  Provides greater financial protection by increasing the liability limits of certain underlying policies.

• Employment practices liability:
  Liability coverage for wrongful termination, discrimination, and other violations of employees' legal rights.

• Errors and omissions:
  A professional liability policy protecting the policyholder against negligent acts and omissions that harm their clients.

• Workers' compensation:
  Pays for medical care and physical rehabilitation of injured workers and helps to replace lost wages while they are unable to work. Your insurance company may also provide resources designed to assist electrical contractors in developing safe working habits to help control insurance costs.

If you're working for a builder or another contractor, you will likely be required to have additional coverage.

Before deciding which policies are best for your business, be sure to contact a licensed business insurance broker or agent, who can provide more detailed information, help solicit quotes from insurers, and answer any questions you have.

An independent agent can help business owners understand which products can best meet their needs.