Commercial general liability george asked 5 months ago
Commercial general liability

I have a small construction business and I had an accident on the job site. I had to install a stone wall and  while I was taking a measurement, part of the stone broke off. The stone is the client’s property, but I claimed it on my commercial liability policy because I was doing the work. My insurance denied the claim saying the wall was part of my scope of work. I am very confused (what is general liability for if not for accidents that happen while doing the work?) and thinking I need a lawyer. Do you have any advice?

1 Answers
Joel Gumbiner Joel Gumbiner Expert answered 2 months ago

George-

Generally, the answer is that you policy has an exclusion for “your work” and does not cover damage you do to the part of the building you are working on. Basically, a contractor’s liability insurer does not want to be an errors and omissions (malpractice) carrier . You have liability coverage to cover you if you injure someone and/or if you cause property damage TO PROPERTY, OR A PART OF THE BUILDING, YOU ARE NOT WORKING DIRECTLY. If you finished the wall, and because of , say, your improper drainage behind it, the house were inundated with water and did damage, you would be covered for that. If your employees accidentally damaged the house while you were working on the outside wall, that would be covered.

You may have made the claim, but liability insurance only covers claims made by third parties AGAINST YOU. So, the claim you refer to is actually a claim the owner of the wall, your customer, is making against you for damaging his wall. You did not mention how much the owner is claiming, how much repair of the damage would be, or whether you are being sued. The main thing liability policy provides is a defense to those claims being made against you. If the wall you damaged is one you were about to do physical work on, it is probably best that you just repair that stone in the course of your work.

Hopefully, that explains the coverage you have and the company’s position. If the owners sues you and/or if the repair of the part of the stone that broke ends up being a litigation against you for tens or hundreds of thousands of dollars, then perhaps it would be something you would want to take up with a lawyer to see if there were some way to argue around the exclusions I referenced above.

Best,

Joel Gumbiner