General liability covers your legal liability for injury and damage to other people and their property, including injury or damage arising from work you have already completed. It does not cover your employees, your tools, your truck, and as a general rule it does not pay to redo your own defective work. That last one is the misunderstanding that catches contractors out most visibly, because general liability is not a warranty on your workmanship. There are real exceptions where subcontractors performed the work, so your own policy wording decides it. ContractorsInsured.net is Pascal Burke Insurance Brokerage, Inc., licensed in California (#6015321) and Texas (#3305690). For an eligible risk with a complete submission we quote general liability the same business day, though a high-hazard trade may need more information before a carrier commits.
| What general liability covers | What that looks like on a job |
|---|---|
| Bodily injury | A visitor is hurt on your jobsite. |
| Property damage | You damage something belonging to your client. |
| Completed operations | Your finished work causes damage after you leave. |
| Medical payments | Small no-fault medical bills, paid without a liability finding. |
It covers other people, not your own crew.
What general liability covers
In brief: A standard commercial general liability policy is built in three parts: bodily injury and property damage to third parties, personal and advertising injury, and medical payments made regardless of fault. For contractors the first part is the one that does the heavy lifting.
The industry names for these parts are worth knowing, because they are what your policy and your broker will call them:
- Coverage A, bodily injury and property damage. The main event. A visitor trips over your extension lead and breaks an ankle. You put a nail through a water pipe and flood a finished room. Someone else is hurt, or someone else’s property is damaged, and you are legally liable for it. This part also pays your legal defence costs, which for a small contractor can matter as much as the settlement itself.
- Coverage B, personal and advertising injury. A defined list of offences that includes libel, slander and copyright infringement in your advertising, and also reaches things like invasion of privacy, false arrest, malicious prosecution and wrongful eviction, subject to the policy wording. It is not the part most construction claims fall under, but it does come up, particularly if you use photographs of work that was not yours.
- Coverage C, medical payments. Specified medical expenses paid regardless of fault for qualifying accidental injuries on premises you own or rent, on ways adjoining them, or arising out of your operations, subject to the policy’s exclusions and a modest limit. It commonly excludes people hired to work for an insured. Because the injured person gets treated without anyone arguing about fault, it can stop a minor incident turning into a liability dispute.
The defence obligation under Coverage A deserves its own line. The insurer’s duty to defend is generally broader than its duty to indemnify, which means the policy can be defending you against an allegation it would never ultimately have to pay. For a small contractor facing a lawyer’s letter, that can be the most valuable thing the policy does.
Products and completed operations, the part contractors underrate
In brief: This can respond where bodily injury or property damage arises out of work you have already completed, subject to the policy’s terms. It is the reason a general contractor wants your coverage to stay in force after the job closes, not lapse the day you drive away.
It is easy to think of liability insurance as protecting only the job you are standing on today. Completed operations is the part that reaches backwards. You build a deck; eighteen months later a connection fails, the deck partially collapses, and someone is injured. You are long gone, the job is closed and paid, and the claim still arrives.
Two practical consequences follow. The first is that letting coverage lapse between jobs is more dangerous than it looks, because the exposure from finished work does not lapse with it. The second is that this is why subcontract insurance clauses so often require coverage to be maintained for a period after completion. If a contract asks for that, it is asking for something real.
“The claim that catches people out is often not from the job they are standing on. It is from one they finished two years ago and had stopped thinking about.” Pascal Burke, Licensed Insurance Broker
What general liability does not cover
In brief: Your own defective workmanship, your employees, your tools, your vehicles, and professional or design errors. The first of those is the one that surprises people, and it is worth being precise about.
Your own defective work
This is one of the biggest misunderstandings about contractor general liability, so here it is plainly. As a general rule, general liability does not pay to rip out and redo your own defective work. It can respond to the damage that defective work causes to other property.
A worked example. You install a shower badly and it leaks. The policy is not there to pay for tearing out and rebuilding the shower, because that is your workmanship and your contractual obligation to the client. It may well respond to the damage the leak caused to the ceiling and the room below, because that is damage to other property arising from the work.
That split, between the defective work itself and the resulting damage, is what the business-risk exclusions in a standard policy are designed to produce. The reasoning is that the quality of your own work is a business risk you control, not a fortuity an insurer should carry.
The important qualification is subcontracted work. Standard wording carries a subcontractor exception, which can preserve cover for damage to your completed work itself where the work, or the work that caused the damage, was performed by a subcontractor on your behalf. Whether cover responds also turns on whether there was an occurrence, when the property damage happened, what endorsements are attached, and the law of your state. So the wording of your actual policy governs rather than any general description, including this one. If a contract or a client is pushing you on this point, have the policy read properly.
Everything else outside the policy
- Your employees’ injuries. That is workers compensation. A direct claim by your injured employee is excluded under general liability, though liability you have assumed under a qualifying insured contract can be treated differently. The two are covered side by side in our guide to workers comp vs general liability.
- Your tools and equipment. Inland marine, sometimes sold as contractor’s equipment coverage. If your kit is stolen off a site, general liability does nothing.
- Your vehicles. Commercial auto. A collision in the work truck is not a general liability claim.
- Design and professional errors. If you design as well as build, or a client relies on your technical advice, professional liability is a separate policy and a separate conversation.
- Pollution, and certain trade-specific exposures. Standard policies contain pollution-related exclusions, and some trades face further restrictions or need specific endorsements. What applies depends on your policy and your trade, so ask rather than assume.
| Covered: damage you cause | Not covered: buy these separately |
|---|---|
| Injury to a non-employee | Redoing your own defective work |
| Damage to a client’s property | Your employees’ injuries |
| Your finished work failing later | Your tools and your truck |
General liability is not a warranty on your workmanship.
Limits, and what the numbers on your certificate mean
In brief: The per-occurrence limit caps what the policy pays for any one occurrence, which can involve several claims or claimants. The general aggregate caps what it pays under that aggregate across the policy period. One million and two million are the limits most commonly specified and purchased, with about 92 percent of one large brokerage’s contractor customers buying exactly that, though your contract controls what you need.
The trap is the aggregate. Contractors read the per-occurrence number and assume it is available every time, but the applicable aggregate is a shared pot for the policy year. Three moderate claims in a bad year can erode it, and what is left for the last job of the year is whatever remains rather than the full amount printed on the certificate. Note also that the general aggregate is not necessarily the ceiling for every coverage, because products and completed operations commonly has its own, and endorsements can make aggregates apply per project or per location.
Two further points worth knowing. Defence costs may sit inside or outside the limit depending on the policy, and that difference matters a great deal in a contested claim. And products and completed operations often carries its own separate aggregate, which is a good thing, because it means completed-work claims do not necessarily eat the limit protecting your current jobs.
Need a certificate that actually matches the contract?
Send us the insurance clause. We will quote to the wording rather than guessing at the limits.
Additional insured, and what a general contractor is really asking for
In brief: Additional insured status extends your policy to cover the general contractor for liability arising from your work. It has to come from the policy’s own provisions or an endorsement. Being listed on a certificate is not the same thing.
This is a detail that causes a lot of avoidable delay on a jobsite. A certificate of insurance is evidence that coverage exists; it does not itself create coverage or grant anyone rights under your policy. If a subcontract requires additional insured status and all you have is a certificate with the general contractor typed into a box, the requirement has not been met.
What is usually being asked for is a package:
- Additional insured status for the general contractor, and often the property owner as well. This can come from a specifically scheduled endorsement, or from a blanket endorsement that automatically covers parties you are required by written contract to add.
- Primary and non-contributory wording, meaning your policy responds first and does not ask theirs to share.
- A waiver of subrogation, which stops your insurer pursuing the general contractor after it has paid a claim.
- Completed operations included in the additional insured status, so the protection survives the end of the job.
These can each carry a cost and an underwriting consequence, though some insurers include standard additional insured status at no charge while charging for completed operations status or other enhancements. Either way, matching the clause exactly at quote stage is faster than discovering a gap when the certificate is rejected. See our guide to the certificate of insurance for what the document does and does not prove.
Does the law require it?
In brief: Generally not at state level, with licence-level exceptions in both states. The contract is what usually forces the issue, and insurance clauses are standard on commercial work.
General liability is not usually mandated by state law for contractors. California requires workers compensation from the first employee, but Texas leaves even that optional for most private employers, so neither policy is universally compelled by statute across the two states. There are licence-level exceptions worth checking: California requires liability insurance of CSLB licensees registered as an LLC, and several Texas licences, including electrical and air conditioning and refrigeration, carry their own insurance minimums.
Beyond licensing, the practical requirement comes from the people who hire you. General contractors, property managers and public owners routinely ask for a certificate before you start, and having no employees does not exempt you: contracts can and do require insurance from solo contractors.
What it costs
In brief: Published figures for contractor general liability range from about $89 per month on one brokerage’s construction book to about $337 per month in a modelled national figure at the same limits. They are built differently and measure different things, and the modelled figure is an estimate its publisher says is not an actual cost.
Insureon reports about $89 per month, or $1,069 per year, for its construction and contracting customers at $1 million and $2 million limits with a $500 deductible, with 39 percent paying under $75 and 76 percent under $150. Its methodology describes these figures as medians of policies actually purchased. MoneyGeek’s modelled figure for a one to four person contractor at the same limits is about $337 per month, spanning roughly $204 to $596 across states.
The gap is methodology, not contradiction: one reflects the middle of what a brokerage’s customers actually bought, while the other models a standard policy for a standard business across 45 contractor industries and every state. The full breakdown, including how trade class moves the number, is in our guide to general liability insurance cost for contractors.
Frequently asked questions
What does general liability insurance cover for contractors?
Injury and damage you cause to other people and their property, plus your legal defence costs. A standard policy has three parts: bodily injury and property damage to third parties, personal and advertising injury such as libel or copyright infringement in advertising, and medical payments made regardless of fault for qualifying accidental injuries on premises you own or rent, on ways adjoining them, or arising out of your operations, which commonly excludes people hired to work for an insured. It also covers products and completed operations, meaning injury or damage arising out of work you have already completed.
Does general liability cover my own defective work?
Generally not. General liability is not a warranty on your workmanship, so it does not usually pay to rip out and redo work you performed defectively, because the quality of your own work is treated as a business risk you control. It can respond to the damage that defective work causes to other property. If you install a shower badly, the policy is not there to rebuild the shower, but it may respond to the water damage to the ceiling below. The main exception is subcontracted work: a standard subcontractor exception can preserve cover for damage to your completed work itself where a subcontractor performed it. Your policy wording, endorsements and state law govern.
Does general liability cover employee injuries?
No, not as a direct claim. Injury to your own employees is excluded, and that is what workers compensation is for. The one qualification is that liability you have assumed under a qualifying insured contract can be treated differently, which is what makes an upstream indemnity claim arising from an employee injury worth understanding. This is why general contractors commonly ask for both policies on your certificate rather than one or the other.
What is products and completed operations coverage?
It can respond where bodily injury or property damage arises out of work you have already completed, subject to the policy's terms. If a deck you built fails eighteen months later and injures someone, that is a completed operations claim even though the job is long closed. It is why subcontract insurance clauses often require coverage to be maintained for a period after completion, and why letting a policy lapse between jobs is riskier than it appears.
What does a $1 million / $2 million limit actually mean?
One million dollars is the most the policy pays for any one occurrence, which can involve several claims or claimants. Two million is the cap on what it pays under the general aggregate during the policy period, which is not the same as a ceiling on the whole policy. The aggregate is a shared pot, so several claims in a bad year can erode it and leave less than the headline figure available for your last job. Products and completed operations often carries its own separate aggregate. Check whether defence costs sit inside or outside your limit, because it makes a large difference in a contested claim.
Is general liability required by law for contractors?
Generally not at state level, though there are licence-level exceptions. California requires liability insurance of CSLB licensees registered as an LLC, and several Texas licences, including electrical and air conditioning and refrigeration, carry their own insurance minimums. In practice the requirement usually comes from your contract, and general contractors, property managers and public owners routinely ask for a certificate before you start. Having no employees does not exempt you, because contracts can require insurance from solo contractors too.
What is an additional insured endorsement?
It extends your policy to cover another party, usually the general contractor and sometimes the property owner, for liability arising out of your work. The status has to come from the policy's provisions or an endorsement, which may be one that specifically schedules the party or a blanket endorsement covering anyone you are required by written contract to add. Being typed into a box on a certificate does not grant anyone rights under your policy, because a certificate is evidence of coverage rather than coverage itself. Contracts often also ask for primary and non-contributory wording, a waiver of subrogation, and completed operations to be included.
What does general liability not cover?
As a general rule the cost of redoing your own defective work, plus injuries to your own employees, your tools and equipment, your vehicles, and design or professional errors. Standard policies also contain pollution-related exclusions, and some trades face further restrictions or need specific endorsements. Tools need inland marine, vehicles need commercial auto, employees need workers compensation, and design exposure needs professional liability.
Get general liability quoted properly
The useful quote is the one that matches the contract in front of you, including the additional insured wording and the limits it actually specifies. Send us the insurance clause with your trade and revenue, and we will price it against carriers with real appetite for your work. We are a licensed brokerage in California and Texas, and for an eligible risk with a complete submission we quote general liability the same business day. See our overview of general liability for contractors, or start below.
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This guide is general information for contractors in California and Texas, not legal advice or a coverage determination. Whether any particular claim is covered depends on your policy wording, the endorsements on it, the facts, and applicable state law.