The biggest question about this topic always is the same. Are the contractors enough protected and in the right way? Contractors liability insurance is typical constructors’ insurance that ensures coverage to contractors and building professionals for construction errors.
Contractors liability insurance, or widely known as CPL insurance, is popular among the contractors, who ensure full design and building services. CPL also provides coverage of errors. Those errors are usually made by the contractor and the third person who was hired by the contractor. The third person is usually a seller, engineer, or architect.
These specialized insurances were built up in the early nineties for contractors’ liability for design errors or omissions. For example, it was developed for situations when the third person is hired by the constructor and when the third person needs to ensure advice on the integral matters.
This kind of coverage can be written on an annual and project basis. When the coverage is an annual, it covers all the constructor’s operations, and when the coverage is on a project basis covers all the contractor’s design liability on a certain project.
CPL insurance ensures protection to contractors and building professionals in case of emergency. The emergency applies to construction errors in the course of construction of a building project. This process can be very complex and hard with lots of designing and building and include many third parties such as architects, designers, engineers, and building contractors.
These third parties are included in just one little aspect of the whole project, for example, designers for design work, or engineer for engineering evaluations.
CPL insurance also ensures protection for plumbers and electricians, workers with the specialized skills for specific part of the project.
When you have larger contractors you can have in-house services, it means more profit to earn and more exposure to the risk. Contractors professional and general liability insurance is made in that way to protect and secure contractors from various risks if they do most of the construction obligations themselves.
This kind of insurance secure contractors from mistakes made during the building process which include design and engineering evaluations process. This insurance is the most useful for the project with various different aspects. In most cases, CPL is contractors who have design-build or construction management services.
When your CGL commercial general liability does not cover those kinds of risks, you must get CPL contractors professional liability. Only insurance which brings you third-party liability protection is CPL.
In your policy contract, you must have the list with the all activities which are covered under this CPL policy. When the contractors purchase the policy, it also must include the list of the actions. On that policy, you will also have a list with the excluded activities. In other words, the policy must cover all the work that the contractor performs.
Contractors professional liability insurance protect and secure losses in the building project. Contractors professional and general liability insurance is often taken out by a contractor and every insurance include a set of these conditions.