General Contractor Limits of Coverage – Are Yours Enough?

When a claim or loss exceeds the limits of coverage provided by a general contractor’s (GC) insurance policy or indemnity agreement, the consequences can be severe. This article will dive more into general contractor coverage limits.

If a claim exceeds the general contractor’s coverage limits, the GC can be responsible for the amounts in excess of the GC’s coverage limits. Corporate assets may be at risk, including equipment, vehicles, and bank accounts, may be at risk. In some cases, individual owners may face exposure if they personally guarantee contracts or if there’s negligence/fraud involved.

To avoid this situation, GCs should consider whether the limits of coverage they purchased are sufficient to adequately protect them for injuries or property damage at all of the GC’s work sites. GCs should also always check to make sure their subcontractors have adequate coverage and limits.

The LHBA GL Trust has several coverage limits to choose from:

• $500,000 per occurrence/$1,000,000 aggregate
• $1,000,000 per occurrence/$2,000,000 aggregate
• $2,000,000 per occurrence/$2,000,000 aggregate

Due to the increasing costs of construction and housing, and due to the risk of on-site non-employee injuries, GCs should carefully consider the limits of coverage they carry – especially since so many of their projects may now be in excess of their coverage limits.

The LHBA GL Trust provides different levels of coverage limits to fit your specific needs, but “backup options” could include an umbrella or excess liability policy that may kick in after primary limits are exhausted. Although the LHBA GL Trust does not offer umbrella or excess liability policies, Markel, who is the reinsurer for the LHBA GL Trust, does offer excess liability policies to Indemnitees of the LHBA GL Trust on a case by case basis through broker Hull & Company.  Please contact your agent if interested. 

Contact Us

For more information regarding the LHBA GL Trust, please contact John Brooks at jbrooks@rmsla.com or 225-999-8820.