Understanding Contractors Professional Liability Insurance

contractors helmet, measuring tape, plans, calculator on table
Understanding Contractors Professional Liability Insurance

Have you been hearing about contractors professional liability insurance (CPLI) in your field of work? If you’re a design professional such as an architect, engineer, or web designer, keep reading to learn why CPLI coverage has become increasingly necessary for contractors who have the responsibility of both designing and building. 

Staples & Associates has everything you need to know about how contractors professional liability insurance protects contractors from claims resulting from negligent errors, or omissions that occurred while performing a professional service. 

What Exactly Does CPLI Cover?

Before we can discuss what CPLI covers, we have to touch on what a typical commercial general liability (CGL) policy does and does not cover. Although professional liability is not excluded from the basic CGL policy, insurers often add an endorsement to exclude it. A CGL policy covers contractors against bodily injury or tangible property damage due to their professional service, but not economic damages.

However, the majority of all claims against design professionals are for economic damages, and CGL coverage would not apply. That’s where CPLI comes in. CPLI fills that coverage gap by protecting contractors from claims made due to an error or omission that occurred while they were performing a professional service. 

Examples of CPLI Claim Situations:

  • Improper design of a concrete floor that cracks under the weight of a company’s equipment.
  • Installation of a heating and cooling system that’s found to be incapable of properly ventilating a building. 
  • A design defect that prohibits a building from being certified.
  • A flaw in a building’s structure causes a business interruption in order to have the flaw repaired.

CPLI is usually written on a claims-made basis, meaning the policy must be active when a professional liability claim is made in order for coverage to apply. Because of this, CPLI should be carried for a long-term period to ensure there is no possibility of an excluded claim in the future.

For a tailored CPLI policy and more information about what could be excluded from the typical coverage, contact our experts at Staples & Associates today!

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