What is Contractors Professional Liability Insurance?
Contractors Professional Liability Insurance is liability insurance that provides coverage to contractors and building professionals for construction errors.Contractors professional liability insurance, it can be abbreviated as CPL insurance, is purchased by contractors that provide building and design services, and provides coverage of errors made by the contractor as well as errors made by third-parties hired by the contractor, such as engineers.
BREAKING DOWN 'Contractors Professional Liability Insurance'
Due to the complex process of Designing and building a structure which involving many parties, including engineers, architects, designers, building contractors, and other building specialists.Some years ago, contractors would hire third parties to handle different aspect of a building project, such as design work or engineering evaluations.
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These days, many contractors provide these services in-house, allowing them to earn more profit, however exposing them to more risk. Therefore contractors professional liability insurance is designed to protect contractors from these risks.contractors professional liability insurance protects contractors from errors created during the design and engineering process, which is useful when projects have many professionals involved in different aspects of the project. This type of insurance is usually reserved for contractors that provide design-build or construction management services.
Contractors Liability Insurance Policy
Policies are designed to cover risks not covered by commercial general liability (CGL) insurance, which may not include professional liability exclusions. The professional liability policy offers third-party liability protection, first-party indemnity, as well as pollution liability. Damages that are covered include economic loss and costs associated with repair.All the coverages are included in the list found in the policy contract, or may be specific to the contractor that has purchased the policy. Many policies will also include a list of activities that are excluded from coverage.
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Either Contractors purchase a standing professional liability insurance policy which protects all work the contractor performs, or purchase a policy that covers specific projects with finite time frames.Tags:
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