Great question! Many contractors assume that professional liability insurance (also called Errors & Omissions insurance) is only necessary for architects, engineers, or consultants. However, it can be critical for certain contractors—especially in today’s business landscape, where contracts often require it.
Why Might a Contractor Need Professional Liability Insurance?
- Contractual Requirements: Even if you don’t provide design services, owners, municipalities, or lenders may require professional liability coverage as a condition of working on a project.
- Defective Work Allegations: If a client claims that your work resulted in financial harm or structural issues due to mistakes, general liability insurance doesn’t cover professional negligence—but professional liability does.
- Project Management Exposure: If you oversee subcontractors or make recommendations that influence project design or execution, a lawsuit could hold you responsible for errors.