Can General Liability Protect You Against Faulty Workmanship Claims?

New entrepreneurs venturing into contracting may wonder if there’s such a thing as general liability faulty workmanship insurance. While a standard general liability insurance policy on its own does not cover professional errors, you can still adjust your policy to include coverage for faulty workmanship.

Does General Liability Insurance Cover Faulty Workmanship?

The concept of general liability faulty workmanship should be broken into general liability insurance as a starting point for contractor coverage. From there, the company should customize the insurance plan to cover various types of faulty workmanship that might arise in construction work. Improper installation or inappropriate materials can create extra expensive damage and removal work that the client should not have to pay.

Most general liability insurance plans focus on paying for bodily injuries and property damage to third parties that happened beyond the policyholder’s control. Mishaps that are within an entity’s power to prevent typically are not covered by basic insurance plans. If the client has special coverage for faulty workmanship, the coverage will pay for fixing contract work that doesn’t meet industry standards.

Exclusions in General Liability Faulty Workmanship

The common general liability policy lists exclusions, which are events that aren’t covered by the plan. These exclusions often include unexplained accidents and work performed by subcontractors. Faulty workmanship is usually an exclusion in a general liability plan. That’s why you need to pay close attention to what the policy says. Even if the contractor did an obviously terrible installation job, you could not use your general liability policy like a warranty to get reimbursed.

General liability insurance is something that a majority of businesses carry. If insurers included faulty workmanship in every business insurance plan, it could lead to massive claims that would drain insurance companies of their assets. By making faulty workmanship a separate specialized plan for an extra expense, payouts are limited to specific criteria similar to policy exclusions.

Occurrence Definition

An occurrence or peril is an event that is covered by an insurance plan, allowing the policyholder to file a claim. Insurance agencies typically don’t consider faulty workmanship an occurrence. Usually, an occurrence is an accident, such as someone tripping over a cord, that leads to bodily injury or property damage. In some cases, an occurrence can be associated with a series of consequences associated with an initial disaster.

Adding a Faulty Workmanship Endorsement to a Policy

The best way to ensure you are covered for poor construction results is to extend your existing general liability insurance policy to include a faulty workmanship endorsement. In the insurance world, endorsement simply means an add-on type of coverage to your existing plan.

All you need to do is talk with your insurance agent and explain why you need faulty workmanship coverage. Ultimately, a faulty workmanship endorsement can save your company thousands of dollars if a worker messes up the client’s property or causes financial loss from a sloppy installation.

Contact Reardon Insurance Agency to Get the Best General Liability Insurance

Hopefully, this information has demystified the confusion surrounding general liability faulty workmanship. It’s easy to get the right coverage by talking with experienced professionals who have answered the same questions for countless policyholders. Contact our team at Reardon Insurance Agency today to get started on a business insurance plan that assures you peace of mind.

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