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Tips : Builders Needs Liability Insurance

General liability insurance covers common business risks like customer injury, customer property damage, and advertising injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.
From carpenters to general contractors, construction businesses and contractors face high risks. General liability insurance helps pay expenses related to third-party injuries and property damage.

If a visitor is injured at your jobsite or property damage occurs during a renovation, for instance, general liability insurance can cover medical bills or the cost of repairs. This policy provides liability coverage related to:

  • Customer injuries
  • Customer property damage
  • Libel and slander
  • Product liability

Below, find details on how these coverages protect your business.

Customer injuries

If a customer trips over a tool box or a ladder while you’re doing electrical or carpentry work, you could be blamed for the injury. If the person sues, you could end up paying for medical and legal expenses. General liability insurance covers:
  • Attorney fees
  • Court-ordered judgments
  • Settlements
  • Medical bills
  • Funeral expenses in fatal incidents

This policy does not cover employee injuries. For that, you’ll need to purchase workers’ compensation insurance.

Customer property damage

Accidents can be costly for builders and contractors. General liability insurance safeguards small businesses when client property is damaged.

For example, if a client’s furniture is damaged during remodeling, your general liability policy could help pay for the cost of repair or replacement. This policy can also cover the cost of a lawsuit if a client decides to take you to court over damaged property.

Libel and slander

While advertising your company and its construction services, it’s possible to inadvertently copy a competitor’s slogan or mimic another advertising campaign. Accidental advertising injuries are covered by general liability insurance, including:

  • Copyright infringement
  • Defamation, both libel (written) and slander (spoken)

Product liability insurance

Construction businesses and contractors should make sure their general liability policy includes product liability insurance, also known as products-completed operations coverage. This insurance protects your business when your finished work caused a bodily injury or property damage due to faulty workmanship.

For example, say a plumber installs a new sink in a kitchen. Two weeks later, the homeowner discovers the sink has leaked and damaged their expensive kitchen floor. This coverage would help pay the plumber’s legal costs if the homeowner files a lawsuit over the faulty installation.

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