Contractor’s Professional Liability Insurance
What Does Contractor’s Professional Liability Insurance Mean?
Contractor’s Professional Liability Insurance (CPL) is a type of commercial insurance that protects contractors from the financial risks associated with errors or omissions in the design and construction of buildings. It is specifically designed to address the design liabilities that contractors may face. Coverage can be provided on either an annual basis or a project-to-project basis.
Insuranceopedia Explains Contractor’s Professional Liability Insurance
In the past, a contractor’s professional liability coverage, when offered, was often an add-on to design liability insurance and typically only covered vicarious liability. This meant it would protect a contractor if a third party they hired, such as an engineer advising on construction design, made an error or omission.
As some contractors began taking on the role of designing and building, rather than hiring third parties like architects and engineers, insurers developed specialized coverage in the 1990s to meet the needs of this emerging market. As a result, contractor’s professional liability coverage is now more widely available as a separate policy, covering the direct liability associated with design-build work.
