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Contractors Professional Liability Insurance

Contractors Professional Liability Insurance

What Is Contractors Professional Liability Insurance?

Contractors professional liability insurance is liability insurance that gives coverage to contractors and building professionals for construction errors. Contractors professional liability insurance, or CPL insurance, is purchased by contractors that give design and building services and includes coverage of mix-ups made by the contractor as well as errors made by third-parties hired by the contractor, like engineers, architects, and different merchants.

Understanding Contractors Professional Liability (CPL) Insurance

Contractors professional liability insurance, or CPL insurance, safeguards contractors and building professionals in case construction errors happen during construction of a building project. Designing and building a structure can be a muddled interaction involving many gatherings, including architects, designers, engineers, building contractors, and other building trained professionals.

Contractors and Third-Party Hires

Contractors might hire third parties to handle various parts of a project, for example, design work or engineering assessments, alongside hiring subcontractors to do parts of construction that require particular skills, like plumbing, electrical work, or drywalling.

Larger contractors might offer these types of assistance in-house, which permits them to earn more profit yet in addition opens them to more risk. Contractors professional liability insurance is designed to shield contractors from these risks when they do the majority of the construction duties themselves.

CPL insurance safeguards contractors from errors made during the design and engineering process and is particularly valuable when projects have numerous professionals involved in various parts of the project.

CPL insurance is typically saved for contractors that give design-fabricate or construction management services.

Policies are designed to cover risks not covered by broad commercial liability (CGL) insurance, which may not include professional liability avoidances. The professional liability policy offers third-party liability protection, first-party indemnity, as well as pollution liability. Damages that are covered include monetary loss and costs associated with repairs.

What Is Covered Under CPL?

The activities covered under the policy might be included in a rundown found in the policy contract or might be specific to the contractor that has purchased the policy. Numerous policies will likewise include a rundown of activities that are excluded from coverage.

Contractors can purchase a standing professional liability insurance policy that covers all work that the contractor performs, however can likewise buy a policy that covers specific projects with finite time periods.

CPL versus Builders Risk Coverage

Contractors professional liability insurance and builders risk coverage both safeguard comparative arrangements of conditions, types of loss, and elements involved in a building project. Be that as it may, contractors professional liability insurance is normally taken out by a contractor, while builders risk coverage is generally taken out by the owner of the project.

What's more, contractors professional liability insurance can be taken out on building improvement projects, yet may not be accessible for another project with no existing structure. Simultaneously, builders risk coverage can safeguard projects that don't have an existing structure.

The Bottom Line

Contractors professional liability insurance gives coverage that safeguards the two contractors and third-party hires, similar to architects, designers, and engineers, in case of errors and missteps made at work, as well as different losses during a building project.


  • CPL might be taken on a mission to safeguard contractors from botches made by third-party merchants associated with a project, as well as different losses connected with repairs.
  • CPL insurance may not be accessible for another project with no existing structure, however builders risk insurance can be taken out in those circumstances.
  • Larger contractors who offer numerous in-house services, like home design, may open themselves to additional risks on a job, and CPL insurance is additionally designed to safeguard these large firms.