CGL Insurance – Don’t Hire a Contractor Without it!

For any build project CGL insurance (Commercial General Liability) is a must. When hiring a general contractor or single trade contractor, a mandatory credential is a current and active CGL policy. No CGL, walk away.

If the contractor you’re considering doesn’t have this coverage, you’re placing yourself at serious risk of costly legal exposure. Not just during construction, but potentially long after the work is complete. Imagine a cracking foundation two years later, a wall that fails, water damage traced back to a faulty installation. CGL insurance is what stands between you and being the party the claims come after.

What CGL Insurance Actually Covers

A contractor’s CGL policy bundles several important liability coverages into a single policy. Together, they protect you as the owner, subcontractors, trade workers, contractor employees, and even bystanders against a wide range of claims. Here’s what each coverage type means in plain terms:

Bodily Injury

CGL Insurance covers claims when a person is physically injured on the job site as a result of the contractor’s carelessness. If you or anyone else is hurt due to unsafe conditions created by your contractor, this coverage responds.

Personal Injury

Goes beyond physical harm to include psychological and emotional injury resulting from negligent or deliberate acts. For example, a bystander injured by an unattended stepladder left in a high-traffic area could file a personal injury claim against your contractor.

Property Damage

Covers damage or loss of property caused by the contractor’s operations. A plumber whose faulty pipe installation causes water damage to walls and floors is a straightforward example of a property damage claim.

Products and Completed Operations

This is the coverage that matters long after your project is done. It covers claims arising from work that was performed improperly — a cracking foundation, a collapsing wall, or a system that fails after installation. Without it, a contractor has no coverage for post-completion claims, and you may be left with no recourse.

Advertising Injury

Covers claims that a contractor’s statements or actions damaged another party’s professional reputation or earnings. Less common in residential projects, but part of a complete CGL policy.

In every case, CGL coverage pays for legal defense costs and any final judgment amounts. This includes the injured party’s medical expenses, lost earnings, and pain and suffering. These costs add up fast in litigation, and without coverage in place, those claims will follow the money — which may lead directly to you.

The Completed Operations Risk Is Easy to Underestimate

Most homeowners focus on what could go wrong during construction. The Products and Completed Operations coverage addresses a risk that’s easier to overlook. These are problems that surface after the contractor has been paid and moved on.

Construction defects don’t always show up immediately. A foundation issue may take a season or two to manifest. A roofing failure may not appear until the first heavy rain after the warranty period. If your contractor’s CGL policy has lapsed or was cancelled you just compounded the problem you just discovered. You may find yourself with a legitimate claim and no insurance to collect against. This is why verifying that coverage will remain active — and understanding the policy period — matters as much as confirming it exists.

What to Ask Before You Sign

Before entering any contract for new construction, renovation, or home improvement work, take these steps:

• Request a Certificate of Insurance directly from the contractor’s insurance agent or broker — not just a copy from the contractor.
• Confirm the policy is current and active and that it won’t expire before your project is complete.
• Check the coverage limits — they should be proportionate to the scope and dollar value of your project.
• Ask to be named as an additional insured on the contractor’s CGL policy for the duration of your project.
• Verify that Products and Completed Operations coverage is included — not all policies are written the same way.

A reputable contractor carries this coverage as a matter of course and will have no hesitation providing proof. One who can’t — or won’t — is telling you something important before you’ve signed a single document.