Understanding what general liability insurance covers in construction requires moving past policy language and into real job-site scenarios. The standard ISO CGL form runs 17 pages of dense legal text. But the coverage decisions that matter to GCs come down to specific situations: who got hurt, what got damaged, when it happened, and whether the policy exclusions apply.

This guide walks through the most common construction scenarios and analyzes whether CGL coverage responds. We also provide a verification checklist so you can confirm your subs carry adequate certificates of insurance for each coverage type.

Scenario 1: Sub's Employee Injures a Pedestrian

The situation. A framing sub's crew member carries a 2x10 across the sidewalk and strikes a pedestrian in the head. The pedestrian sustains a concussion and $42,000 in medical bills.

Does general liability insurance cover this? Yes. The sub's CGL Coverage A responds to bodily injury sustained by a third party (the pedestrian) caused by the sub's operations. The per-occurrence limit applies.

GC exposure. If the pedestrian also sues the GC for failing to maintain safe sidewalk passage, the GC's own CGL responds. If the GC is named as additional insured on the sub's policy, the GC can tender the claim to the sub's insurer first.

Key verification point. Confirm the sub's CGL is occurrence-based with at least $1M per occurrence. Verify additional insured endorsement names the GC.

Scenario 2: Sub Damages an Existing Structure

The situation. An excavation sub's backhoe vibrations crack the foundation of an adjacent retail building. Repair estimates come in at $220,000. The retailer also claims $85,000 in lost revenue during repairs.

Does general liability insurance cover this? Yes. Both components are covered. The foundation crack is physical property damage under Coverage A. The lost revenue is "loss of use of tangible property" under Coverage A. Total exposure: $305,000.

GC exposure. The adjacent building owner will likely sue both the sub and the GC. If the GC holds additional insured status on the sub's CGL, the GC tenders defense and indemnity to the sub's insurer.

Key verification point. Check that the sub's CGL does not contain an underground resources and equipment (XCU) exclusion. Older policies or cheap policies sometimes exclude damage from excavation, pile driving, or caisson work.

Scenario 3: Defective Workmanship Discovered After Completion

The situation. A mechanical sub installs an HVAC system in a 4-story office building. Eight months after occupancy, the ductwork connections fail, causing water condensation damage to three floors of finished ceilings and walls. Repair cost: $340,000.

Does general liability insurance cover this? Partially. The damage to the ceilings and walls (property owned by others) is covered under products-completed operations. The cost to repair or replace the defective ductwork itself is not covered. CGL policies exclude damage to "your work" (the sub's own completed work).

Coverage breakdown:

Item	Covered?	Coverage Part	Estimated Cost
Ceiling and wall water damage	Yes	Products-completed ops	$210,000
Ductwork replacement (the sub's own work)	No	Excluded ("your work")	$130,000
Building owner's temporary relocation	Yes	Loss of use	$48,000
Total covered by CGL			$258,000
Total not covered			$130,000

Key verification point. Verify the sub's CGL includes products-completed operations with no sunset clause shorter than the statute of repose. Confirm the products-completed operations aggregate is at least $2M.

Scenario 4: Tool Left on Site Causes Injury

The situation. An electrical sub leaves a cable spool in a hallway overnight. A painting crew member trips on it the next morning and breaks a wrist. Medical bills and lost wages total $28,000.

Does general liability insurance cover this? Yes. The electrical sub's CGL Coverage A covers bodily injury to a third party (the painter is not the electrical sub's employee) caused by the sub's operations (leaving equipment in a walkway).

But there is a twist. The injured painter's own employer (the painting sub) has workers' compensation that covers the injury. The painting sub's workers' comp insurer will pay the claim and then subrogate against the electrical sub's CGL. This means the electrical sub's CGL ultimately pays, but through the subrogation process.

Key verification point. Both subs need active CGL policies. The electrical sub needs sufficient per-occurrence limits. The GC should verify all subs maintain clean work areas through daily site inspections, reducing the frequency of these claims.

Scenario 5: Water Damage During Active Construction

The situation. A plumbing sub leaves a test cap off overnight. Water flows for 10 hours, flooding two floors of a partially completed building. Damage to other trades' installed work (drywall, flooring, electrical) totals $175,000.

Does general liability insurance cover this? Yes, for damage to other subs' work. The plumbing sub's CGL covers property damage to tangible property belonging to others (the other trades' completed work). The plumbing sub's own installed pipe and fittings are not covered under the "your work" exclusion.

GC exposure. The GC faces schedule delay costs on top of the physical damage. CGL does not cover the GC's own delay costs, but it covers third-party property damage claims from other subs and the owner.

Scenario 6: Completed Building Has a Slip-and-Fall

The situation. Eighteen months after project completion, a visitor slips on a polished concrete floor installed by a flooring sub. The floor meets all code requirements but is inherently slippery when wet. The visitor breaks a hip. Medical bills and potential lawsuit: $350,000.

Does general liability insurance cover this? This is a gray area. Coverage depends on whether the injury results from a "defect" in the work or an inherent characteristic of the specified product. If the flooring was installed per specifications and meets code, the sub may argue there is no negligence. If the floor is found to be unreasonably dangerous despite meeting code, Coverage A through products-completed operations would respond.

Key verification point. Verify the flooring sub's CGL includes products-completed operations for at least three to five years after completion. Check that the per-occurrence limit ($1M minimum) can handle the full exposure.

What General Liability Insurance Does NOT Cover

Exposure	Why CGL Does Not Cover It	What Does Cover It
Sub's own employee injuries	Workers' comp exclusion	Workers' compensation
Sub's own defective work (repair/rework)	"Your work" exclusion	Sub's own funds or warranty
Damage to sub's own equipment	"Your property" exclusion	Inland marine / equipment floater
Auto accidents	Auto exclusion	Commercial auto liability
Professional design errors	Professional services exclusion	Professional liability (E&O)
Intentional damage	Expected/intended injury exclusion	Nothing. Intentional acts are uninsurable
Pollution/environmental contamination	Pollution exclusion	Pollution liability policy
Damage to the project itself	"Your product" exclusion	Builders risk / property insurance

Your CGL Verification Checklist

Use this checklist every time you review a sub's certificate of insurance.

Policy basics:

CGL is listed as occurrence-based (not claims-made)
Policy dates cover the full project duration plus expected completion date
Carrier has AM Best rating of A- VII or better

Limits:

Per occurrence: minimum $1,000,000
General aggregate: minimum $2,000,000
Products-completed operations aggregate: minimum $2,000,000
Medical payments: minimum $5,000 per person

Endorsements required:

Additional insured for ongoing operations (CG 20 10 or equivalent)
Additional insured for completed operations (CG 20 37 or equivalent)
Primary and non-contributory endorsement
Waiver of subrogation endorsement

Exclusions to reject:

No XCU exclusion (for excavation, foundation, or demolition trades)
No residential exclusion (if project has residential components)
No height exclusion (if work is above 15 feet)
No products-completed operations exclusion
No sunset clause shorter than statute of repose

We built SubcontractorAudit to run this checklist automatically on every uploaded certificate. The platform flags deficiencies, sends correction requests to subs, and tracks resolution. No spreadsheets, no manual reviews.

Frequently Asked Questions

Does general liability insurance cover construction defects? CGL covers property damage and bodily injury caused by construction defects, but not the cost to fix the defect itself. If a defective window installation causes water damage to interior walls, the wall damage is covered. The window replacement is not.

Is general liability insurance required by law for contractors? Requirements vary by state. Thirteen states require contractors to carry CGL as a condition of licensure. Others leave it to contractual requirements. Even in states without a mandate, most GCs and owners require CGL from every subcontractor as a contract condition.

What is the typical deductible on a contractor's CGL policy? Standard CGL policies do not carry deductibles. They use self-insured retentions (SIRs) or none at all. When SIRs exist, they typically range from $1,000 to $10,000 per claim. Cheap policies sometimes carry SIRs of $25,000 to $50,000, which means the sub pays that amount before the insurer steps in.

Can a GC be held liable for a sub's work even with proper insurance? Yes. Insurance transfers financial risk, not legal liability. A GC can still face lawsuits and legal defense costs even when the sub's insurance responds to the claim. The GC's own CGL and umbrella policies provide backup protection when sub coverage is insufficient.

How long does general liability insurance cover construction work after completion? Products-completed operations coverage within the CGL typically lasts as long as the policy remains active and no sunset clause limits duration. Standard policies do not impose a cutoff. Cheap policies sometimes add sunset endorsements limiting coverage to 2 to 3 years after completion.

What is the difference between general liability and professional liability for contractors? General liability covers bodily injury and property damage from physical operations. Professional liability covers financial losses from design errors, incorrect specifications, or negligent professional advice. A sub who provides design-build services needs both policies.