Everybody makes mistakes - it’s a part of life.
Unfortunately, some mistakes such as those made by a construction company can become costly liabilities if they negatively affect a customer.
That’s where contractors liability insurance comes in.
Designed to protect contractors if found liable for making a professional mistake, this is an essential policy that every contractor should purchase from their business insurance agency.
What Is Contractors Professional Liability Insurance?
Contractors professional liability insurance is a policy that protects contracting businesses against construction errors that may happen while a job is being completed.
Also called CPL insurance, this coverage is vital protection for your construction firm, since mistakes do happen and any liability that may arise due to a mistake could be substantial.
As this policy covers only liabilities due to professional errors, it is different than contractor's general liability insurance as well as builder’s risk insurance and should be purchased separately to ensure a company has total liability coverage.
What Are The Risk Exposures Of Contractors?
Today’s construction companies bear more liability than ever before, partially due to their need to involve multiple individuals and businesses in the final construction projects.
Third-party firms like architects and designers, civil engineers, as well as internal parties like project managers may all be involved in the building process in addition to the actual laborers with each of those parties representing another risk exposure for the construction company.
In the event that something does go wrong even if it’s due to a mistake made by a designer or engineer, the construction company can still be held partially liable.
Contractors liability insurance protects a construction company against any liability levied on them as part of the whole of whatever caused the mistake and any damages suffered.
What Does Contractors Liability Insurance Cover?
Contractors professional liability insurance will protect your contracting business when professional mistakes cause some kind of loss.
These can include design mistakes that result in structural damage, HVAC problems, injuries, property damage, and a list of other losses; economic losses due to those mistakes; financial losses on the materials used for the project; bodily injury; and many other liabilities.
It also covers these errors whether made by your company, or a third party that you hire to work with such as an architectural firm, engineer, or another type of contractor.
CPL Insurance - Construction Company Critical Coverage
A mistake made on a construction project whether due to a workmanship error, a design error, or otherwise can result in devastating losses for your customer as well as your own company.
Because your construction business relies on the skills and performance of many other professionals to complete its projects, this leaves you with a high level of risk for things that go wrong and are out of your hands and beyond your direct area of expertise.
Protect yourself against the effects of costly errors, no matter who makes them, with the appropriate liability policy sold by a contractors liability insurance agency that understands the risks involved and how to cover them.