General contractors liability insurance

Commercial general liability insurance is a type of insurance that provides coverage for claims made for losses suffered by third parties. Commercial general liability insurance covers claims for bodily injury, property damage, and other injuries covered by the policy, such as libel or slander. Owners of projects typically maintain a Commercial general liability insurance policy, and contractors, subcontractors, and design professionals are usually required by owners to maintain Commercial general liability insurance while working on projects. This requirement is universal and evens the standard American Institute of Architects documents, such as the American Institute of Architects document, General Conditions, requires the general contractor to obtain insurance for certain types of claims generally included in Commercial general liability policies.

Most Commercial general liability policies are “occurrence” based policies obligating the insurer to define and indemnifies the insured against covered damages caused by an occurrence during or after the policy period. The most common type of claims on construction projects is for bodily injures sustained by construction workers not employed by the insured.

As with most insurance policies, Commercial general liability policies contain numerous exclusions. Exclusions differ from policy to policy and can change between policy periods. The insured is advised to review the Commercial general liability policy carefully so that the insured has adequate insurance to cover a loss and to comply with the insurance requirements in its contract. With respect to design professionals, commercial general liability policies typically exclude from coverage relating to professional services. Many commercial general liability policies also exclude coverage for errors and omissions by general contractors acting in the capacity of a construction manager. Typical exclusions in commercial general liability policies relating to bodily injury or property damages include:

Property Insurance

Property insurance is a type of first party liability insurance that covers a loss relating to property of the named insured. As with builders risk insurance, property insurance may be purchased as either an "all risk" policy or a "perils"policy. A property insurance policy typically provides insurance for the insured personal property, such as office contents, computers, inventory, and also for specified buildings. It is important to determine which exclusions are not covered or which perils are covered by the property insurance policy so that the insured may obtain additional coverage for losses for which it requires insurance.

A typical perils policy includes coverage for fire, lightning, wind storm or hail, and the accidental discharge of water or steam from a plumbing or other building system. Typical exclusions in property insurance policies include:

Owner-Controlled Insurance Policies

While design professionals, contractors, and owners are usually required to obtain their own insurance for a construction project, some owners purchase owner controlled insurance policies, commonly called “wrap up” or project policies, to ensure the owner and other parties involved in the construction of the project. Depending upon the policy, the owner controlled insurance policies insurance program generally provides commercial general liability insurance, builders risk insurance, and workers compensation insurance for the project. Owner controlled insurance policies are increasingly providing coverage for professional negligence as well. By purchasing an owner controlled insurance policies, the owner provides these types of insurance for the mutual benefit of most or all of the people involved in the construction process regardless of any technicalities concerning multiplicity of insurable interests.

An owner controlled insurance policies insurance policy is especially useful in the construction industry where multi-party projects involve potentially dangerous operations and high risks of property damage. Owners generally favor owner controlled insurance policies because they provide an insurance plan that provides maximum protection and minimum costs, as well as reduced delays, disputes, and litigation. The most significant advantage of an owner controlled insurance policies policy is that it provides the owner with a fixed and segregated amount of funds available to cover design and construction related problems.

Although there are benefits to owner controlled insurance policies insurance programs, the same issues and controversies addressed in traditional forms of insurance, as well as new issues, exist. The general contractor procured the wrap up policy providing the subcontractor general liability coverage. The general contractor alleged that the subcontractor was responsible for damage to the work of another subcontractor on the project and refused to make find payment to the insured subcontractor on the project and refused to make final payment to the insured subcontractor unless it was reimbursed for the damage.