What type of insurance coverage is typically issued to contractors to cover risk of liability to third parties?

Commercial General Liability (CGL) insurance is specifically designed to safeguard contractors and businesses against claims of bodily injury or property damage that occur as a result of their work. This type of coverage protects against various third-party liabilities, ensuring that if someone is injured or if their property is damaged while the contractor is performing work, the insurance will cover legal fees, settlements, and medical expenses.

For contractors, having CGL insurance is essential because it addresses the risks associated with construction projects and operations, which can include accidents and unforeseen issues that may arise. This comprehensive coverage is particularly vital in the construction industry, where the potential for injury or damage is higher due to the nature of the work involved.

In contrast, other types of insurance mentioned, such as Professional Liability Insurance, is more focused on errors or omissions in professional services, Builder's Risk Insurance covers the property under construction against damages, and Auto Liability Insurance pertains to bodily injury and property damage resulting from vehicle-related incidents. While they may provide important coverage for other aspects of a contractor's services, they do not specifically address the general liability risks that CGL insurance is designed to cover.