General Liability Insurance
Commercial insurance that protects a contractor against claims of bodily injury or property damage caused to third parties during business operations. The foundational policy required by most general contracting work.
General liability insurance protects a contractor from claims that arise when their operations cause bodily injury or property damage to a third party. It is the baseline policy that most general contractors must carry to work legally and satisfy owner or permit requirements.
What General Liability Covers
The policy responds to claims from people who are not employees of the contractor. A neighbor injured by falling debris, a homeowner whose finished floors are damaged by a tool drop, a property owner whose landscaping is torn up during access — all of these are classic general liability exposures. The policy pays for medical expenses, property damage repair, legal defense, and settlements up to the policy limits.
Limits and Structure
General liability is structured with a per-occurrence limit and an annual aggregate limit. Contractors should understand both. Many jobs require the contractor to add the property owner or general contractor as an additional insured, which extends coverage to that party for liability arising from the contractor's work. Certificates of insurance are issued to prove coverage is in force.
What It Does Not Do
General liability does not cover the contractor's own employees (that is workers compensation), the contractor's own work product (that is professional liability or warranty), vehicles (auto), or the structure under construction (builders risk). A complete insurance program combines these policies so that each type of exposure is covered by the right form.
Frequently asked questions
Most states, municipalities, and property owners require contractors to carry general liability before they can pull permits or work on a job. Minimum limits vary, but $1M per occurrence and $2M aggregate is a common baseline for residential restoration work.
It covers third-party bodily injury, third-party property damage, and related legal defense costs. It does not cover injuries to the contractor's own employees (that is workers compensation) or damage to the structure under construction (that is builders risk).
It does not cover poor workmanship on the contractor's own completed work, professional errors in design, employee injuries, damage to vehicles, or intentional acts. Those gaps are filled by separate policies like workers comp, auto, and professional liability.
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