10 Things New York Contractors Should Look for When Buying Commercial General and Umbrella Liability Insurance

As a New York contractor, protecting your business from liability is critical. Commercial General Liability (CGL) and Umbrella Liability insurance provide essential coverage to safeguard your operations from claims arising out of accidents, property damage, and legal disputes. However, not all policies are created equal, and understanding the key elements of your coverage is crucial to ensure that your business is adequately protected. Here are 10 things to look for when buying commercial general and umbrella liability insurance:

1. Adequate Coverage Limits

One of the most important aspects of both CGL and umbrella liability insurance is ensuring you have enough coverage to protect against major claims. CGL policies typically come with limits for bodily injury, property damage, and products-completed operations, but these limits may not be enough for larger claims. Make sure your coverage is sufficient based on the size and risk level of your projects.

2. Products-Completed Operations Coverage

For contractors, a significant risk occurs after a project is completed. Products-completed operations coverage protects your business if work you completed causes injury or property damage down the line. It’s vital to ensure this is included in your CGL policy and that coverage continues after the project is finished.

3. Contractual Liability Coverage

Many New York construction contracts require contractors to assume liability for certain risks. Contractual liability coverage under your CGL policy protects you against claims related to liabilities you assume through written contracts, such as indemnifying the project owner or general contractor. Be sure this provision is included and that it aligns with your contractual obligations.

4. Coverage for Subcontractors

If you hire subcontractors, your CGL policy should address liability arising from their work. It’s common for policies to exclude claims related to subcontractor work, so it’s essential to either ensure your policy covers subcontractors or require subcontractors to carry their own insurance and name you as an additional insured.

5. Primary and Non-Contributory Coverage

New York contractors often work under agreements that require their liability insurance to be primary and non-contributory. This means that, in the event of a claim, your insurance will respond first, without seeking contribution from the additional insured’s coverage. Verify that your policy includes this provision, as it’s often a requirement for working with certain project owners and general contractors.

6. Defense Costs Coverage

Legal defense costs can quickly escalate during a lawsuit, even if the claim is frivolous. Look for policies where defense costs are covered outside of the liability limits. This ensures that legal fees do not erode the total amount available for settlements or judgments, keeping more coverage available for paying claims.

7. Exclusions and Endorsements

Be sure to carefully review the exclusions and endorsements on both your CGL and umbrella policies. Common exclusions for construction contractors include certain types of work, pollution claims, and professional liability. Additionally, make sure endorsements are appropriate to your needs and add necessary coverages, such as additional insured status for project owners.

8. Umbrella Policy Compatibility

Your umbrella policy should seamlessly extend coverage beyond the limits of your CGL policy. Ensure that it mirrors the terms and conditions of your underlying policies, as discrepancies between policies could lead to coverage gaps. It’s crucial that your umbrella policy “follows form,” meaning it applies the same terms and exclusions as your CGL policy.

9. Employer’s Liability Coverage

While your workers’ compensation policy covers injuries to employees, employer’s liability coverage—often included in CGL policies—provides protection for claims that fall outside the scope of workers’ compensation, such as third-party over claims or claims by employees alleging unsafe working conditions. Be sure this coverage is included, especially if your employees work in high-risk environments.

10. Claims-Made vs. Occurrence Policies

Another critical factor is whether your CGL and umbrella policies are claims-made or occurrence-based. Occurrence policies cover incidents that occur during the policy period, even if the claim is filed later. Claims-made policies only cover claims filed while the policy is in effect. Contractors typically prefer occurrence-based policies for the broader protection they offer.

BGES Group: Your New York Construction Insurance Experts

Navigating the complexities of commercial general and umbrella liability insurance can be daunting, but BGES Group is here to help. We specialize in providing comprehensive insurance solutions tailored to New York contractors. Whether you need help understanding policy limits, endorsements, or additional insured requirements, we’ll guide you through the process to ensure your business is fully protected.

If you need assistance in purchasing the right commercial general or umbrella liability insurance, contact Gary Wallach at BGES Group today. We offer expert advice and personalized service to ensure you get the coverage you need at competitive prices.

Reach out to Gary Wallach at 914-806-5853, via email at bgesgroup@gmail.com, or visit our website at www.bgesgroup.com for more information.

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