Everything You Need To Know About A Contractor Liability Insurance (And Why It's Important For A Business]

If you are a contractor, you know that the construction business has many risks. Every day, all your employees work with potentially dangerous equipment, significantly increasing the risk of injuries. No matter how vigilant you and your workers are, you may also experience accidental property damage. Thus, you must always be ready for the worst. In other words, you should consider getting extra protection in the form of contractor liability insurance.

What is a Contractor Liability Insurance?

It is insurance acquired by a contractor to protect them against property damage, injuries, or accidents suffered on the job.

Construction is a risky job that exposes workers to a wide range of accidents. In 2019, for instance, 20% of worker fatalities in the US private sector occurred in the construction industry. The most common construction accidents include explosions and burns, falls, injury by falling debris, electrocutions, machinery accidents, and ground collapses.

Also, construction workers can unintentionally damage property, especially when the remodeling process is underway. In other instances, damage results from mishandling of construction tools and materials.

In case of the above events, contractor liability insurance protects your business from adverse financial implications of injury lawsuits and damage claims.

What Does the Contractor Liability Insurance Cover?

Typically, the contractor liability insurance covers the following:

  • Injury Claims – It pays for medical expenses and court-awarded compensations. If the worker passes away, it covers funeral expenses.
  • Damage Claims – The insurance protects you if your workers accidentally damage the customer's property.
  • Copyright Claims – If your competitors sued for copyright infringement, the insurance pays all the related costs.
  • Product Claims – If some of the equipment you have installed causes significant damages, the insurance pays for it.

Why Should You Get a Contractor Liability Insurance?

By its nature, the construction process comes with obvious risks. Thus, you need to have insurance coverage to cushion your business when unexpected events and incidences occur. Having contractor liability insurance has the following benefits:

  • Protects Your Business – Making compensations can significantly affect your profits and business asset. However, the insurance covers all costs, preventing negative financial implications.
  • Ensures Business Continuity – Accidents and injuries can be expensive and can jeopardize normal construction operations. However, contractor liability insurance covers all the related expenses, preventing a possible disruption of routine operations.
  • Protects Your Staff – The insurance gives you and your staff peace of mind knowing that they would be compensated in case of an accident or incident.


Getting contractor liability insurance is a good way of protecting your business and staff against adverse events and incidences. It covers all expenses related to accidents, injuries, or property damage.