For many contractors, General Liability (GL) insurance is viewed as the foundation of their risk management program—and often the finish line as well. While GL coverage is essential, relying on it alone can create a dangerous false sense of security. The reality is that General Liability policies have significant limitations, especially when it comes to faulty workmanship, subcontractor-related claims, and completed operations exposures.
In today’s construction environment, where claims are larger, contracts are stricter, and owners are more aggressive about risk transfer, General Liability simply isn’t enough to fully protect contractors.
What General Liability Is Designed to Do
General Liability insurance is intended to cover third-party bodily injury and property damage claims arising out of a contractor’s operations. Slip-and-fall accidents, damage to neighboring property, or injuries caused by falling debris are classic GL claims.
However, GL policies were never designed to function as a warranty for construction work or a catch-all safety net for every mistake made on a project. That distinction is where many contractors get into trouble.
Faulty Workmanship: The Biggest Misunderstanding
One of the most common misconceptions contractors have is believing that GL insurance covers defective or faulty workmanship.
In reality:
- The cost to repair or replace your own defective work is generally not covered
- GL policies are not performance bonds or guarantees of quality
- Coverage typically applies only when faulty work causes resulting damage to other property, and even then, exclusions and endorsements can significantly limit coverage
For example, if improper installation causes water intrusion that damages other areas of a building, there may be coverage for the resulting damage—but not for correcting the original defective work. And many modern policy endorsements further restrict even this limited protection.
Subcontractor Errors Create Serious Exposure
Contractors often assume they’re protected if a problem is caused by a subcontractor. This assumption can be costly.
Issues arise when:
- Subcontractors carry inadequate coverage
- Their policies exclude completed operations
- Additional insured endorsements are missing or defective
- Your own policy includes restrictive endorsements limiting subcontractor-related claims
Even if a subcontractor is clearly at fault, the general contractor is frequently named first in lawsuits. Without proper additional insured status, contractual risk transfer, and excess coverage, contractors can find themselves paying out-of-pocket for claims they believed would be insured.
Completed Operations: Where Claims Often Appear Years Later
Completed operations exposure is another area where contractors are frequently underinsured.
Claims related to construction defects often arise years after a project is completed—when:
- A building leaks
- Structural issues emerge
- Mechanical or electrical failures occur
If completed operations coverage is reduced, restricted, or excluded through endorsements, contractors may have little or no coverage when the most serious claims surface. This risk is amplified when projects involve residential construction, mixed-use buildings, or high-value properties.
Additional Insured Coverage Isn’t Automatic—or Guaranteed
Many contracts require contractors to add owners, developers, and property managers as additional insureds. While contractors assume their GL policy satisfies this requirement, that’s not always true.
Problems include:
- Endorsements that limit additional insured coverage to ongoing operations only
- No coverage for completed operations
- Excess policies that fail to follow form
- Primary and non-contributory wording that does not apply as expected
If additional insured coverage is improperly structured, contractors may be in breach of contract—and exposed to uninsured loss.
Why Contractors Need More Than Just GL
To truly protect their business, contractors typically need a coordinated insurance program that may include:
- Excess and Umbrella Liability that properly follows form
- Professional or Contractors E&O coverage for design and construction management exposures
- Properly structured subcontractor insurance requirements
- Careful review of policy endorsements that silently remove coverage
- Contract review focused on insurance and indemnification language
Without this broader approach, contractors are exposed to gaps that don’t become apparent until a claim is denied.
How BGES Group Helps New York Contractors
BGES Group specializes in insurance and risk management solutions tailored specifically for New York contractors. We understand the unique challenges posed by New York construction projects, aggressive contracts, complex additional insured requirements, and increasingly restrictive policy forms.
Led by Owner Gary Wallach, BGES Group works proactively—not reactively—to identify coverage gaps before claims occur. Our approach goes beyond issuing policies. We:
- Analyze General Liability, Excess, and Umbrella forms line by line
- Identify restrictive endorsements that limit coverage
- Review subcontractor insurance compliance
- Help contractors align their insurance programs with real-world contractual obligations
- Advocate for coverage structures that protect contractors when it matters most
Our goal is simple: to help contractors avoid uninsured losses, denied claims, and costly surprises.
Contact BGES Group
If you’re a contractor operating in New York and relying solely on General Liability coverage, now is the time to take a closer look.
BGES Group
Owner: Gary Wallach
Phone: 914-806-5853
Email: bgesgroup@gmail.com
Website: www.bgesgroup@gmail.com
Office Location: Larchmont, NY 10538
Protecting your business takes more than General Liability. BGES Group is here to help you build an insurance program that actually works when a claim hits.