The Key Insurance Policies

Contractors typically carry several policies — each covers a different risk.

• General Liability (GL) — third-party bodily injury and property damage you cause. The foundational policy; owners almost always require it.
• Workers' Compensation — covers employee injuries; required by law in most states once you have employees.
• Builder's Risk — covers the project under construction (fire, theft, weather) until it's complete.
• Commercial Auto — your vehicles.
• Umbrella / Excess — extra liability limits above your other policies.
• Professional Liability (E&O) — design errors (important for design-build).
• Tools & Equipment (inland marine) — your tools and gear.

Going Deeper (Intermediate)

The core contractor policies:

• General Liability (CGL) — third-party injury and property damage.
• Workers' Compensation — your employees' injuries (legally required).
• Commercial Auto — your vehicles.
• Builder's Risk — property/course-of-construction coverage for the project itself.
• Inland Marine — tools and equipment.
• Umbrella/Excess — extra limits over the others; plus Professional/Pollution for some scopes.

Advanced / Pro-Level

The gaps that bite contractors:

• CGL generally excludes your own faulty workmanship (the "your work" exclusion) — so quality control and warranties matter; completed-operations coverage handles later defect claims.
• Occurrence vs. claims-made forms change when a claim is covered (claims-made needs tail coverage).
• Builder's risk — clarify who carries it and what it covers (often the owner).
• Your Workers' Comp experience mod (EMR) directly drives premium — a strong safety record literally lowers your insurance cost and helps you win bids.
• Match your limits to the contract's requirements or you can't sign.

Practice Challenge

A client sues over a defect in your own installed work, expecting your CGL to pay. Why might it not? (Answer: CGL typically excludes your own faulty workmanship (the "your work"/business-risk exclusion) — it covers resulting third-party damage, not redoing your bad work; that's why QC, warranties, and completed-operations coverage matter.)

In Practice

A contractor carries general liability but no workers' comp — then an employee is injured and they're personally on the hook. Each policy covers a different, real risk.

Common Mistakes to Avoid

• Missing a key policy like workers' comp
• Not understanding what each policy covers
• Letting coverage lapse

Takeaway: Know your policies: GL (injuries/damage), workers' comp (employees), builder's risk (the project), auto, umbrella, and tools.

Educational content — not legal, insurance, or financial advice. Work with a licensed insurance agent and attorney for your specific situation.