Streetsmart insurance Blog
As an experienced contractor, you know that one dissatisfied client can destroy your entire business. If one of your clients sues you because they are not satisfied with your work, you will have to divert funds from your business to pay for your legal expenses. General Liability (GL) insurance and Errors & Omissions (E&O) insurance are both designed to protect you from those third party claims, but they do not cover the same areas of liability.
General Liability insurance protects contractors from bodily injury and property damage claims. If your client or their customer is injured because of your work, General Liability insurance will pay for your legal defense. If your client or their customer suffers from property damage because of the work that you have performed, General Liability insurance will also pay for your legal fees. Unfortunately, General Liability insurance was not designed to protect service providers from third party claims.
On the other hand, Errors & Omissions insurance protects contractors from professional liability claims. If your client sues you for breach of contract, design errors, or substandard work, an Errors & Omissions insurance policy will pay for your legal fees and any financial judgments that they are awarded.
So Which One Is Better?
In the past, there has been a clear distinction between architects, engineers, and project management firms that provide services and general contractors who complete projects for hire. This separation has allowed contractors to purchase General Liability insurance as professionals who create products so that they can avoid falling in the category of service providers.
Today, many contractors are independent business owners who provide client services and complete projects. If you fall into both categories, you should have a General Liability insurance policy and an Errors & Omissions insurance policy to protect yourself from any potential lawsuits.
Street Smart Insurance is committed to providing affordable coverage. Whether you are looking for your first general liability insurance policy or you are shopping for a better price, our agents are ready to help. Call us at 732-462-8343 for a free quote!