I’m a contractor. Do I need Professional Liability (E&O) insurance?

If you are a general contractor or subcontractor (plumber, electrician, HVAC professional, etc.) you probably maintain general liability insurance coverage. This important coverage protects your business against third party claims of bodily injury, property damage, and more. But did you know you could also be sued for professional negligence, faulty workmanship, or job site pollution – even if you haven’t made a mistake?  

To protect your business against the financial consequences of these kinds of lawsuits, you need insurance for professional liability, sometimes called E&O or errors and omissions. This important coverage protects you in the event of an actual or alleged error (something you did that you shouldn’t have) or omission (something you didn’t do that you should have) while providing your professional service.  

Hiscox offers award-winning professional liability insurance for general contractors and subcontractors. To find out how much this important coverage will cost for your business, get a quote.  

📢 Related: What is general liability insurance and why do you need it?  

What does Hiscox professional liability insurance for contractors cover?

📌 Hiscox professional liability insurance for contractors covers a multitude of situations that could arise as you perform your professional services. Here are some of them.  

Negligence for wrongful acts

This includes mistakes and omissions you make – or are alleged to have made – while providing professional services. It also includes failure in your duty of care (which means protecting others from harm), providing incorrect advice, or failing to perform your professional services.  

Faulty workmanship

This includes claims that allege faulty or inadequate skill, quality, or craftsmanship, or the use of defective materials or products in covered work.  

Job site pollution liability

This is coverage for claims that arise from the discharge of pollutants that directly results from covered work at a job site.  

Bodily injury, property damage, and personal injury

Professional liability insurance from Hiscox will pay for covered claims of bodily injury, property damage, and personal injury (libel and slander) that arise as a direct result of your professional services. Other instances of these kinds of claims may be covered by your general liability insurance policy.  

Other covered costs

Some of the other costs that could be covered by Hiscox professional liability insurance include defense costs for covered claims, including the appointment of an attorney to defend you; FHA, OSHA, and ADA regulatory proceedings; and administrative hearings.  

📢 Related: Got employees? Here’s what you need to know about workers comp

How professional liability insurance protects contractors

Whether you are a general contractor or an artisan subcontractor, professional liability insurance can protect you in many different situations. Here are some examples.  

📌 A general contractor misinterprets the architect’s design for an office building, neglecting to include the required accessibility features. The error is discovered prior to the opening of the building, but the time required to fix the problem results in costly delays for the client. The client sues the general contractor, but their costs, including defense costs and a settlement, are covered by the GC’s professional liability insurance policy.  

📌 An HVAC contractor hires an apprentice to assist in installing a central heating and air conditioning system in a home renovation. The apprentice does not complete the installation correctly, and the system does not function correctly as a result and needs to be replaced. The homeowner sues the contractor, but their costs are covered by their professional liability insurance policy.  

💡✍ Having both general liability and professional liability insurance will provide more comprehensive protection for your contracting business. To determine the right type and amount of coverage, and how much it will cost, get a quote.  

Frequently asked questions:

I’m a sole proprietor. Do I still need professional liability insurance?

Yes. In fact, professional liability (sometimes called errors and omissions or E&O) insurance is particularly important for sole proprietors. If you are sued because of something you did or didn’t do while providing your professional services, your personal assets – such as your home – could be at risk. Professional liability insurance can protect you.  

I’m a subcontractor. Am I covered under the GC’s policy?

You may be, but it’s smart to have your own coverage as well. There may be limitations to your protection under the general contractor’s policy, so to ensure you are fully protected, consider your own professional liability policy.  

How much does professional liability insurance for contractors cost?

The cost of professional liability will vary depending on a number of factors, including the size of your business, the services you provide and your location. But the fixed cost of a professional liability policy for your business is likely far less than the potential cost of a lawsuit. To find out how much professional liability coverage will cost for your business, get a quote.