What Contractor General Liability Actually Covers on a Job

Quick answer: Contractor general liability covers third-party bodily injury, third-party property damage, and the resulting legal defense costs when your work harms someone or something that isn't yours. It does not cover your own employees' injuries, damage to your own tools, or, in most cases, repairing your own faulty workmanship. A standard limit is $1M per occurrence / $2M aggregate.

The three things GL pays for

Commercial general liability (CGL) sounds abstract until something goes wrong on site. In practice it does three concrete jobs:

1. Third-party bodily injury. Someone who isn't your employee gets hurt because of your work — a client, a delivery driver, a passerby.
2. Third-party property damage. Your operations damage property that isn't yours — a neighbor's fence, a customer's flooring, a building you're working inside.
3. Legal defense. GL pays your attorney, court costs, and any settlement or judgment, up to your policy limit — often the most valuable part when a claim is disputed.

Most contractors carry $1 million per occurrence and $2 million aggregate. "Per occurrence" is the most GL pays for a single incident; "aggregate" is the most it pays across the whole policy year.

Real job-site examples

Coverage makes more sense with scenarios. Here's GL doing its job:

• Your crew leaves a bucket of water and a homeowner slips, breaks a wrist, and sues — covered (third-party bodily injury).
• A dropped tool cracks a client's granite countertop — covered (third-party property damage).
• Sparks from your work start a fire that damages the neighboring unit — covered.
• A pipe you disturbed floods the unit downstairs — covered (property that isn't yours).
• Months after you finish, a client claims your deck railing failed and injured a guest — potentially covered under products-completed operations, the part of GL that responds after the job is done.

What general liability does NOT cover

Just as important is knowing where GL stops. These common losses need other policies:

The workmanship point trips up a lot of contractors. GL is not a warranty on your craftsmanship. If a wall you built is simply defective, GL generally won't pay to rebuild it. But if that defect causes separate damage — the wall fails and destroys a client's equipment — that resulting damage may be covered. The line is fact-specific, which is exactly why claims get lawyers involved.

The endorsements GCs bolt onto your GL

On commercial jobs, GL rarely stands alone. General contractors require you to modify your policy so their risk is protected too:

• Additional insured — CG 20 10 extends your coverage to the GC for ongoing operations while you're working.
• Additional insured — CG 20 37 extends it for completed operations after the job wraps.
• Primary and non-contributory means your policy pays first, before the GC's own insurance.
• Waiver of subrogation stops your insurer from later suing the GC to recover what it paid.

You prove all of this with a certificate of insurance. These are standard ISO forms, and getting them right is what keeps you on the schedule.

What GL costs in 2026

For a typical California contractor, general liability runs roughly $600 to $2,500+ per year for a $1M/$2M policy. Where you land depends on your trade (roofing, framing, and concrete cost more than handyman or finish work), your annual revenue, your subcontractor use, and your claims history. Higher limits and umbrella coverage add cost but are often required on bigger projects.

These are typical ranges for small-to-midsize contractors and vary by carrier and risk profile. We don't guarantee a price without reviewing your operation.

General information only, not legal or coverage advice. Coverage depends on your actual policy language and facts. Confirm details with your agent.