Is Deficient Workmanship Covered by General Liability Insurance?

How to protect against claims of deficient workmanship.

As a business owner, you are responsible for your employees’ actions—including their mistakes.  If your employee fails to complete their work in an acceptable manner and is accused of deficient workmanship, then this can lead to some serious issues.  This is why it’s so important to have the right small business insurance in place.  If you have general liability protection for your business, then you might assume that your policy will offer coverage for deficient workmanship.  Unfortunately, this isn’t always the case.  Here’s what you need to know.

  • What Does General Liability Insurance Cover?

General liability insurance is designed to offer coverage in the event that your company is found liable for third-party injuries and/or property damages.  Based on this definition, you might think that your general liability policy offers coverage for the mistakes that your employees make while on the job.  However, this isn’t the case.  Standard general liability policies exclude coverage for “errors in service.”  This means that any mistakes that you or your employees make while rendering your professional services will not be covered by general liability insurance.

  • Getting the Coverage that You Need

If your business is service-based, then securing the right professional liability insurance will help you get the coverage that you need.  Also known as errors and omissions insurance, professional liability insurance offers coverage in the event that an employee makes a mistake or is negligent while completing their professional duties.  If your business is involved in the manufacture, storage, distribution, or sale of products, then you should secure a product liability policy.  This type of insurance offers coverage in the event that a product causes injuries, damages, or other losses to a consumer or third-party.

This is what you need to know about general liability insurance and its limitations when it comes to claims of deficient workmanship.  Do you have additional questions about your small business insurance?  If so, then contact the experts at PMC Insurance Group for assistance today.

By PMC Insurance Group

Since 1996, PMC Insurance Group has worked to help independent agents grow their client base by offering workers' compensation solutions for a wide array of businesses. As one of the most distinguished workers' compensation wholesalers in the country, we have the tools and resources to help you create coverage programs for both small businesses and large accounts.