Common Construction Liability Claims


General Liability insurance is a must-have coverage for general contractors, subcontractors, and artisan contractors, protecting them against third-party bodily injury and property damage, personal and advertising injury, and products and completed operation risks.

When meeting clients and prospective customers, it’s always a good idea to demonstrate what could happen without the right insurance. The best way to do this is with actual claims examples.

Here are several claims scenarios you can share with your clients and prospects to help drive home the importance of a comprehensive contractor’s Liability insurance program.

Bodily Injury Claims

A homeowner hired the services of a contractor to renovate her kitchen. During a construction site tour, a ladder fell and hit the owner, causing her to slip and fall and break her leg. The contractor’s General Liability policy paid for her medical expenses and other related costs.

A property owner hired a handyman to replace tiles in a bathroom. The handyman accidentally left his tools on the floor while working. The homeowner fell over the tools, breaking his wrist. General Liability insurance covered the injured homeowner’s medical bills and the legal bills resulting from the lawsuit filed by the homeowner as a result of his injuries.

During a new home build, one of the crew’s tools fell off the roof and injured a pedestrian below. The pedestrian sued the contractor for her injuries and pain and suffering. General Liability insurance paid the injured pedestrian’s medical bills, legal costs, and settlement amount, which was within the policy’s limit.

Property Damage Claims

While working on a homeowner’s property, a plumber accidentally hammered a nail into a plumbing line, causing severe water damage in the home. The homeowner sued the plumber for the damage and repairs, which was covered under the General Liability policy.

An HVAC contractor incorrectly installed a central air conditioning unit, causing a refrigerant leak and damaging an office suite’s property. The contractor’s General Liability insurance stepped to cover property-related costs.

A contractor with 20 years of expertise was working on a relatively simple basement drywall repair project. His employees had to turn off the home’s sump pump to reach the affected area. Unfortunately, they forgot to reconnect the sump pump once the job was completed. Instead of redirecting groundwater away from the house, the sump pump stood idle. After the drywall contractor and the crew left, the basement flooded, causing significant water damage to the residence. The contractor’s General Liability insurance policy covered the costs of repairing the property damage caused by the incident.

Products & Completed Operations Claims

A contractor built a deck for a homeowner but neglected to fasten the deck to the wall. One month after the deck was finished, it collapsed and injured the owner. The owner’s medical expenses were covered under the Products & Completed Operations portion in the General Liability policy.

ISC offers four different General Liability programs for contractors, depending on their needs:

STANDARD, PLUS, ADVANTAGE, and PREMIER. We also offer Excess Liability insurance to provide contractors with additional limits.

*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.