Contractors Liability Insurance protects you if you are sued for causing bodily harm and/or damage to the property of another. Furthermore, it assists with the cost of your legal defense as well as settlement costs if awarded.


Lawsuits are extremely expensive.  They can result in you losing everything if you do not have the correct insurance.  There are some myths about Contractors Liability insurance. What should you avoid?


MYTH #1 I don’t need Contractors Liability – my business is too small

This is a common misconception. Contractors sometimes think they don’t need it; it’s just them and a couple of employees. They aren’t working on huge developments.  The projects they work on are small.  Thus, there is no requirement to spend money on the insurance that they are not going to need.


Why is this NOT TRUE?

If an accident happens, the size of your business does not matter. When a person claims that the actions of your company resulted in them being harmed, they can launch a lawsuit. Accidents happen easily in construction.  It is the nature of the work.  A building site has many hazards, even when you implement good safety practices. If you drop a garage door on your client’s car, or a visitor slips and breaks a leg, you could face huge expenses.


MYTH #2 Contractors Liability protects my employees

One of the damages covered by Contractors Liability is bodily injury. This covers you when a third party claims damages as a result of the actions of your company. You may believe that Contractors Liability covers employee injuries too.


Why is this NOT TRUE?

Injuries to our own employees are covered by Workers Compensation.  This coverage assists with the resulting medical costs as well as the loss of income they incur. Contractors Liability only applies to third-party claims, not employees.  Workers Compensation is mandatory for your company.  If an accident occurs and you do not have it, you will face a hefty fine. You will also be accountable for the expenses of your employee.


MYTH #3 Contractors Liability Protects Me If I Make A Mistake

If I make professional mistakes on a project, surely my liability insurance will protect me. This could be a design fault that ends up costing my client.  It could be poor craftsmanship that results in damages in the future.  This is what liability insurance is for.


Why is this NOT TRUE?

Contractors Liability Insurance, or General Liability Insurance, does not cover you for negligence or mistakes in your professional service.  This is covered by Professional Liability Insurance. Another name for it is Errors & Omissions Insurance.


Contractors Liability Insurance from Farmer Brown Insurance

John Brown President Farmer Brown Insurance (888) 973 0016

John Brown – President

Let us assist you with a tailored insurance solution for your business.  We have many years of experience in the industry. Don’t take our word for it – our 5-star customer ratings speak for themselves.  Call Farmer Brown Insurance on (888) 973-0016 and put us to the test.


Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.