You just landed a big job with a general contractor. Then the email arrives: “Please send a COI showing $1M/$2M general liability, with us named as additional insured, and a waiver of subrogation.” If that sentence made your head spin, you’re not alone. Here’s what general liability insurance is and how to handle those requests.
Quick takeaway
- General liability covers third-party injuries, property damage, and advertising injury.
- It doesn’t cover your employees, your own property, or professional mistakes.
- Contracts often require specific limits, additional insured status, or waivers.
- A certificate of insurance (COI) shows proof of coverage; it doesn’t change coverage.
What is general liability insurance for contractors and small businesses?
Commercial general liability (CGL or GL) protects your business when it’s held legally responsible for injuring someone or damaging their property. It’s often the first policy a business buys, and it’s commonly part of a Business Owner’s Policy. Coverage varies by policy and carrier.
What general liability typically covers
- Bodily injury: a customer or member of the public hurt because of your operations.
- Property damage: damage your business causes to someone else’s property, like a client’s floor.
- Products and completed operations: injury or damage caused by products you sell or work you’ve finished.
- Personal and advertising injury: claims like libel, slander, or copyright infringement in your ads.
- Medical payments: minor medical bills for someone hurt at your business, regardless of fault.
- Legal defense: typically pays to defend covered claims, even groundless ones.
What it typically doesn’t cover
- Injuries to your employees, which fall under workers’ compensation.
- Damage to your own property or tools.
- Professional errors or advice, which need professional liability.
- Vehicle accidents, which fall under commercial auto.
- Intentional acts and most pollution claims.
Decoding contract language
Certificate of insurance (COI): a one-page summary showing your coverage, limits, and policy dates. It’s proof of insurance, but it doesn’t change or add coverage by itself.
$1M/$2M: usually means a $1 million per-occurrence limit (the most paid for one claim) and a $2 million aggregate limit (the most paid for all claims during the policy term).
Additional insured: an endorsement that extends certain coverage under your policy to another party, like a client or general contractor, for claims arising from your work.
Waiver of subrogation: an agreement that your insurer won’t try to recover money from the other party after paying a claim. Often required on construction jobs.
Primary and non-contributory: language asking that your policy pay first, without seeking contribution from the client’s policy.
Each of these needs to be added correctly on the policy, not just typed onto a certificate.
Contractors and trades around Nashville
Middle Tennessee’s growth has kept contractors, landscapers, cleaners, and other trades busy, from Antioch and Madison to Spring Hill, Gallatin, La Vergne, and White House, and general contractors and property managers routinely ask for COIs before work starts. If you hire subcontractors, keep in mind that the Tennessee Bureau of Workers’ Compensation says construction employers must carry workers’ comp even with one employee, and it offers a coverage verification tool to check subcontractors. A sub without coverage can create problems for you.
4 mistakes contractors make
- Sending a certificate that doesn’t match the contract. If the contract requires additional insured status, it needs to be endorsed on the policy.
- Letting coverage lapse between jobs. Completed operations claims can come up long after the work is done.
- Misclassifying the work you do. If your policy describes you as a painter but you also do roofing, a roofing claim could be a problem.
- Assuming GL covers your tools. Tools and equipment usually need inland marine coverage.
Questions to ask your agent
- Do my limits meet my contracts?
- Is additional insured status blanket or scheduled on my policy?
- Are completed operations covered?
- How quickly can you issue certificates?
What to do if there’s an incident on a job
Even careful businesses have accidents. If someone is hurt or property is damaged:
- Make sure everyone is safe, and call 911 if needed.
- Document the scene with photos and notes, and collect witness names.
- Don’t admit fault or promise to pay for damages.
- Notify your agent and carrier promptly, even if you think the claim is small. Late reporting can complicate coverage.
- Tell the general contractor or client according to your contract.
- Keep copies of contracts, emails, and invoices related to the job.
Keep your certificates organized
Many contractors juggle dozens of COIs. Keep a simple list of which clients need certificates, their additional insured and waiver requirements, and when each certificate expires. When your policy renews, ask your agent to send updated certificates to the clients who need them.
Frequently asked questions
Is general liability insurance required in Tennessee?
It’s usually required by contracts, landlords, licensing bodies, or clients, rather than a general state law. Requirements depend on your work.
What’s the difference between general liability and professional liability?
General liability covers injuries and property damage. Professional liability covers financial harm from errors in your professional services or advice.
What does $1M/$2M mean on a general liability policy?
Typically $1 million per occurrence and $2 million aggregate for the policy term.
How fast can I get a certificate of insurance?
Once coverage is in force, certificates can often be issued quickly. Endorsements like additional insured may take a bit longer.
How much is general liability insurance in Tennessee?
It depends on your industry, revenue or payroll, limits, claims history, and carrier. Higher-risk trades generally pay more than office-based businesses.
Next step
Learn more about general liability insurance with Eric Henry, Insurance Agent, and send Eric your contract requirements so he can compare options that meet them.
Coverage descriptions are general information only; your policy documents determine actual coverage. Availability varies by carrier.
