It is a well-known fact that businesses must carry insurance, but many people seem to forget about the independent contractors who offer their services to different businesses or companies. Like business owners, contractors also need professional liability insurance to be well protected if an unpleasant or unforeseen situation arises.
What Is Contractors Professional Liability Insurance (CPL Insurance)?
This policy offers coverage to both the contractor and those hired by the contractor for any mistakes or errors made during the execution of a contract.
Contractors and building experts deal with complicated designs and other building specialties. Errors can occur whether on the part of the architects, designers, or engineers. To stay protected from the consequences of these mistakes, contractors’ professional liability insurance is required.
The CPL insurance is specific to contractors who specialize in providing design-build or construction management services. It usually covers risks that are not covered by general commercial liability insurance. It is most useful when many professionals are involved in different aspects of a particular project, like the home design or building construction. CPL insurance has coverage for third-party liability protection, first-party indemnity, pollution liability, and economic loss and repair costs.
The Extent of Coverage Offered
CPL can cover numerous incidents that may already be included in a standard list of coverages provided by the policy or specifically tailored to the contractor. Some policies may include a list of incidents that are not covered by CPL insurance. A standing professional liability insurance policy that covers the entire work of the contractor, as well as specific projects with finite time frames, can also be purchased by contractors.
Contractor Professional Liability (CPL) Insurance vs. Builders Risk Coverage
There is not a lot of difference between these two policies. They both cover the same sets of conditions, types of loss, and entities involved in building a project. The difference is that builder’s risk coverage is purchased by the project owner, while CPL insurance is purchased by the contractor.
While contractors’ professional liability insurance may not be available for a new project with no existing structure (even though it can be taken out on building improvement projects), a builder’s risk coverage can offer protection or cover projects with no existing structure.
Thus, contractors’ professional liability insurance protects both the contractors and the hired third parties like engineers, architects, designers, etc., from errors and mistakes that occur on the job. It also includes coverage for losses or damages that might occur during a building project to save you from unplanned expenses.
If you’re looking to protect your business with the right insurance policies, contact the experts at Pittman Insurance Group, LLC today. We are eager to answer any questions you might have about commercial coverage.