Professional Liability Insurance for Contractors, Builders & Other Construction Professionals
In some industries, Professional Liability Insurance (also called Errors and Omissions Insurance) is a standard part of a business's insurance portfolio, but most contractors and construction businesses don't need Professional Liability.
Why is that? Because most building and construction liability is already covered under General Liability Insurance.
Why Contractors Usually Don't Need Professional Liability Insurance
Professional Liability Insurance is a malpractice insurance that covers lawsuits regarding shortcomings that might include:
However, this coverage doesn't really apply to the kind of work most contractors do. Most contractors and construction professionals build and install things for clients. They work on and with a client's property. If they make a mistake (like botching a window installation), their liabilities are for the damaged property and injuries they caused, which are already covered by General Liability Insurance. They don't need a separate Professional Liability policy.
Why is that? Because most building and construction liability is already covered under General Liability Insurance.
Why Contractors Usually Don't Need Professional Liability Insurance
Professional Liability Insurance is a malpractice insurance that covers lawsuits regarding shortcomings that might include:
- Failure to deliver promised services.
- Negligence in providing professional services.
- Incomplete work.
- Errors and oversights.
However, this coverage doesn't really apply to the kind of work most contractors do. Most contractors and construction professionals build and install things for clients. They work on and with a client's property. If they make a mistake (like botching a window installation), their liabilities are for the damaged property and injuries they caused, which are already covered by General Liability Insurance. They don't need a separate Professional Liability policy.
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Which Contracting Businesses Need Professional Liability Insurance?
While most contractors don't need Professional Liability Insurance, a few might. Depending on the specifics of their operation, Property Preservationists and Home Inspectors could need this policy. Say a home inspector signs off on a basement renovation. If the inspector overlooks flaws in the work, they could be sued. The inspector didn't build or install anything. Their only liability — a.k.a. business risk — is for giving an accurate home inspection. In this case, they'd need a Professional Liability policy to cover their risk and pay for a lawsuit because the work they do isn't building or installation. If you think you may need Professional Liability insurance, or if you have any further questions about your coverage as a general contractor, Contact a Buckner agent today! |
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