Inside Contractor’s Professional Liability Insurance


Contractors Professional Liability (CPL) insurance protects contractors from financial losses associated with claims of alleged negligence, errors, or omissions in their professional services.

Who Should Carry CPL Insurance?

Construction managers; general contractors; and artisans and tradespeople such as plumbers, roofers, and electrical contractors should carry CPL coverage, as errors in professional services on a construction project can lead to a variety of issues, including rework, schedule delays, and loss of use – all of which could result in economic damages for the contractor’s client.

It’s important to note that your General Liability policy will not cover professional liability-related claims, making CPL insurance an important component of your asset protection.

What Type of Exposures Are Covered?

A CPL policy covers claims made by clients or third parties who allege that the contractor professional’s negligent actions, errors, or omissions led to financial losses or damages in a construction project. The policy covers a wide range of professional liability claims, including:

  • Design errors
  • Faulty engineering
  • Inadequate project management
  • Failure to meet specifications
  • Code violations
  • Other professional errors

Contractors can purchase coverage limits based on their needs and the scale of the projects. They typically can choose between project-specific CPL policies covering a single project or blanket policies providing coverage for multiple projects throughout the policy period.

The policy typically covers legal defense costs, including attorney fees, court costs, and settlements or judgments, up to the policy limits.

Note: A CPL policy won’t cover legal disputes due to claims involving bodily injuries or property damage from normal construction operations. It also won’t cover personal injuries, such as libel and slander, or contractual liability issues.

Get Peace of Mind with a CPL Policy

CPL insurance is valuable because it helps protect contractors from the potentially devastating financial consequences of professional liability claims. Such claims can result in costly legal battles, damage to the contractor’s reputation, and financial losses that can threaten the viability of the business.

*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.