Understanding General Liability Insurance

Understanding General Liability Insurance


If you are looking to create a risk management program for a construction site, then insurance should be high on the list. First on that list? Commercial General Liability CGL.) This type of insurance policy serves as a platform from which you build your perfect protective base.

Things like Builder’s Risk, Excess Liability, and Professional Liability all stack on to General Liability and, in total, make sure all gaps are filled. As such, you must understand what goes into liability insurance – which is what Farmer Brown’s Insurance is talking about today.

What is General Liability Insurance?

A CGL insurance policy is designed to cover costs from bodily injury, personal injury, or damage to property of third parties. Unlike other types of contractor’s insurance, CGL is generally done through what’s called an ISO (Insurance Service Office) form.

This standardization does a lot to help to ensure that the contractor knows what he or she is getting and whether or not they are covered as they should be for each job site or construction project.

What does Commercial General Liability Protect From?

If you have a CGL policy, you’ll be covered from a few different types of harm in a few different areas. First, the areas of protection usually include all areas owned by the general contractor as well as the project sites that the general contractor is working on.

Next, CGL covers the liability that independent contractors present on-site as well as any contractual liabilities presented by indemnity agreements found in the contracts. Lastly, you’ll have coverage from claims arising from the previous projects you have handled and any awards or settlements covered in the liability claims from any of the above.

The Goal of General Liability:

The goal of obtaining general liability insurance is to protect the general contractor from various expected risks when working in construction. You, as the business owner, want a degree of certainty that you’ll be covered and that you’ll be able to keep doing business even if something happens. Especially if it’s not your fault and is the fault of a subcontractor or other unrelated person.

Considerations When Obtaining Commercial General Liability:

If you are looking for a CGL policy, then you should make sure of a few things before you sign any contracts.

Find a Good Experienced Agent

If you want to protect your general construction business, then you want the best agent to help you find insurance. Find the agent who’s worked in construction for years and might even know your competition.

This will enable them to understand what your needs are and types of risks you often deal with. Finally, don’t forget to shop around. Just because one agent seems to know their stuff, don’t mean they are the best out there.

Cover All Risks

Don’t leave anything to chance when you’re looking to protect yourself. To remove any “chances,” try listing all of the potential risks that your business would have. Think about redefining the definition of “occurrence” to include construction defect claims, if possible.

Once you have all your risks written down, talk to your agent. A good agent might think up a few other risks that you didn’t think about. With all those in mind, a good policy will fall into place.


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