Understanding General Liability Insurance for Construction Companies

The construction industry is consistently rated as one of the most dangerous in the United States. Amid the daily operations of a construction company are many risks and perils, including working at heights, heavy machinery, sharp objects, motor vehicles and hazardous materials. These factors may inherently endanger workers on the job site but must also be considered when assessing the potential for incidents affecting third parties. If a construction company’s operations cause losses for other parties, it could have significant financial ramifications, meaning that firms must have adequate loss control measures, such as suitable general liability insurance.

What Does General Liability Insurance Cover?

As its name suggests, general liability insurance casts a diverse safety net across many common risks and exposures that might need to be accounted for in various work environments. For construction companies regularly conducting business operations in areas near or occupied by third parties, this coverage may be an essential component of an adequate insurance portfolio.

General liability insurance can provide financial assistance to insulate firms from losses arising from the following incidents:

• Bodily injury—If a construction company is responsible for another party’s injuries, this coverage can help pay medical bills and lost income.
• Property damage—This coverage can compensate third parties if a firm’s operations damage their property.
• Personal and advertising injury—If a business is at fault for personal injury or reputational harm, such as slander, libel, copyright infringement or false advertising, this coverage can help pay for legal costs and losses.

What Factors Influence the Cost of General Liability Insurance?

Like many types of insurance, the cost of general liability insurance may vary significantly. Given the many perils and exposures inherent in the operations of construction companies, insurers may be comprehensive when vetting risk levels and coverage needs. In most cases, this analysis will include consideration of the following factors:

• Subsector (e.g., roofing, paving, plumbing)
• Location
• Business size
• Claims history
• Coverage limits
• Insured subcontractors
• Policy endorsements

Get the Right Coverage

Even the most experienced and diligent construction companies may eventually be involved in an accident or error affecting a third party. Given the potential financial losses and project delays resulting from a liability lawsuit, such incidents could have wide-reaching ramifications for the job at hand and a firm’s long-term prospects. With this in mind, businesses should not underestimate the financial assistance made available through general liability insurance.

We’re here to help. At Insurance Solutions Inc., our dedicated agents have the knowledge and experience to help construction companies assess and address their general liability coverage needs. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.