Most business owners need commercial general liability insurance to protect against lawsuits and unexpected disasters. Running a risky business without insurance is a common way companies fail. Here are important points about exclusions in a commercial general liability insurance policy.
Insurance companies use exclusions in policies to exclude or limit coverage for specific events in certain places. An example of an exclusion is a liability policy that covers third-party injuries but not subcontractors. Some policies may have exclusions for specific states due to state laws. Pay attention to areas of a policy noted with a "Designated Work Exclusion" or "Designated States Exclusion."
Some construction projects may be excluded by an insurer who sees risks in them, whether for apartments or houses. Exclusions in a commercial general liability insurance policy may apply to different construction phases or the number of units. Contractors can tap into lower insurance rates when insurers use residential exclusions in certain areas.
The relationship between contractors and subcontractors must be clear regarding which parties are responsible for specific liabilities involved with collaborative projects. Construction insurers often use exclusions to indicate a policy does not cover independent subcontractors. The language "Injury to Contractors or Subcontractors and Their Workers" may be used to identify specific exclusions.
In theory, the subcontractor's Workers' Compensation policy should cover any injuries to the outsourced worker at a construction site. It's still essential for each party to know how they are covered for accidents on the job.
It's common for a Commercial General Liability policy to include a subsidence/earth movement exclusion about landslides and other types of unexpected land movement. This exclusion can be complicated for underground utility contractors. It's essential to check for these exclusions, which may create coverage gaps.
In some cases, subcontractors must meet special conditions for their activities to be covered. These requirements may include Certificates of Insurance (COI), which provide proof of coverage. Some firms require high COI ratings from insurance carriers as well. Insured parties may also need to obtain indemnification agreements from subcontractors.
Our team at GrayStone Insurance Group is ready to help you secure matching commercial general liability insurance for your business. We'll help simplify and demystify the process. Contact us today to get started!
