Professional liability insurance for contractors

When a contractor provides a professional service

Design-build work, drawings, specifications, consulting, inspections and construction management can involve advice a customer relies on. Your contract may assign these responsibilities even when most of your revenue comes from installation.

The policy defines which professional services are covered. Tell us what you design or recommend, who signs off on it and which outside professionals you hire. General liability may exclude professional services, so the design responsibility needs its own review.

A design mistake and a physical accident are different

A claim can involve added costs or delays even without bodily injury or physical property damage. Whether those costs qualify depends on the professional liability form and the services it accepts.

Claims-made coverage makes timing especially important

Many professional liability policies are claims-made. They focus on when a claim is first made, with reporting requirements that must also be followed. The policy may require the error to occur on or after a retroactive date, which is the earliest date eligible prior work can fall within the coverage.

For example, moving that date forward when switching insurers can leave older services outside the intended protection. Keep the prior policy and compare dates before replacing it. Report demands and circumstances using the policy’s instructions rather than waiting for a renewal conversation.

Changing insurers or closing the business

An extended reporting period, sometimes called a tail, may allow qualifying claims to be reported after the policy ends. It generally does not insure new professional work performed after coverage ends. Its availability, length, cost and conditions need to be reviewed before cancellation.

Continuing responsibility for earlier advice does not disappear because the business closes. Tell us about a sale, retirement or change in services while there is time to compare the available options.

What to share for a useful review

Send a description of your professional services, sample agreements, revenue from those services, qualifications and details of subcontracted design work. Include prior coverage, the retroactive date and any known claims or demands.

We can compare the policy’s covered services with your contract duties and explain deductibles, defense costs and reporting deadlines. Liability for installation, employee injuries and vehicles still needs to be addressed alongside the professional coverage.

Common questions