Washington General Liability Insurance

General Liability protects your assets in case of injury, property damage, third-party accidents, or client lawsuits. The Department of Labor & Industries requires a minimum of $200,000 in public liability and $50,000 in property damage or a $250,000 combined single limit in coverage. The L&I must be listed as a certificate holder on your Liability insurance.

General Liability Application

Why do contractors require General Liability insurance?

Contractor General Liability insurance is frequently required by a contractor's customer (commercial, residential, or General Contractor if operating as a subcontractor) to assure the financial ability to pay in the event of a claim.

Increasingly more contractors' clients are requesting verification of their General Liability insurance coverage. CCIS issues a Certificate of Insurance to all contractors upon the purchase of the policy, which can be used as proof of insurance. Some contractors' clients request that they be listed as an "Additional Insured" on the policy. CCIS can supply the "Additional Insured" papers upon request.

How much does a contractor General Liability policy cost in Washington State?

The policy cost is based on several factors, including contractor’s classification, payroll, subcontractor costs, gross receipts and location.

*Prices shown are for a one year term and based on several factors including, but not limited to, classification, payroll, subcontractor costs, gross receipts and location. Rates do not constitute an offer of coverage and are subject to change at any time. Rates may fall outside average ranges shown here due to exceptional risk factors.

Not all insurance companies use the same underwriting criteria to determine the premium of a policy. Additional underwriting criteria that may or may not be utilized includes credit score, policy age, experience, and number of years the insured has not made any claims. There are many additional coverages, deductibles, fees, taxes and exclusions that can be added to a policy which can affect the premium rate.

What does a contractor's General Liability policy cover?

A Contractor General Liability coverage covers third-party claims for damages resulting from the insured contractor's business operations. Coverage excludes defective craftsmanship or damage to the insured's work. Claim types covered include bodily injury, property damage, product and finished operations, medical costs, and personal and advertising injury. The following are descriptions of the coverages:

• Bodily Injury: An injury, illness, or disease suffered by a person, including death.
• Property Damage: Refers to physical injury to tangible property, as well as any subsequent loss of use.
• Product and finished Operations: Coverage is offered for bodily injury and property damage after a project has been finished, but only for work done during the policy period
• Medical Payments: Covers medical expenses for bodily injury caused by an accident that occurs within the policy period. Coverage is usually restricted to $5,000.
• Personal and Advertising Injury: Injuries caused by false arrest, malicious prosecution, unlawful eviction, the use of another's concept in an advertisement, copyright infringement, or the publication of anything that slanders, libels, or violates a person's right to privacy. Not prevalent in contractor general liability cases.

Typically, a policy will have coverage limits of $1 million per incident, $2 million in aggregate, and $2 million for products or finished operations. Insurance carriers can provide numerous variations on these restrictions. If additional coverage is required, a contractor can buy an Excess policy. The Excess coverage will cover any damages that exceed the maximum limits of primary General Liability policy.

How do claims work for contractor General Liability insurance?

General Liability policies can be occurrence or claims-made based. Occurrence policies cover claims that occur during the policy period no matter when the claim is filed. Claims-made policies cover claims only when both the occurrence and the resulting claim happen during the period the policy is in force. Claims-made policies are typically not accepted by third parties as a valid form of General Liability coverage. As such, we recommend contractors carry occurrence coverage and will focus on the claims process with these policies. 

The insurance company has a duty to defend the insured contractor but has discretion to settle any suit. If a claim is made, the contractor is responsible for paying the deductible, and the insurance company will cover the balance of damages and/or medical payments up to the policy limits.

What is a premium audit and what occurs during it?

Typically, when contractors apply for General Liability insurance, they must provide estimates for business expenses, payroll, and income, which are then used by the insurance company to determine the premium for the next period.  An insurance premium audit examines the construction business’s company's financial records (usually payroll or sales) to identify its real risk exposure and adjusts your premium accordingly. If the size and conditions of your business change, so will the insurance requirements and the contractor may owe or be owned premium based on the changes.

Insurers may conduct premium audits at any time from one week after the policy is bound, up to the end of the policy term. If a claim is made against the policy, the insurance company is highly likely to conduct an audit.