As a construction professional, you perform each job with care and skill. You could face a faulty workmanship claim if you or your subcontractors make a mistake on a job, use inferior materials, or otherwise fail to satisfy a client. Because one claim could exceed thousands of dollars and jeopardize your company, you need the right insurance that covers potential faulty workmanship claims.
Review your General Liability Insurance Policy
General liability insurance covers third-party bodily injuries and property damage caused by accidents. Use this important insurance to cover liability you incur from an occurrence, such as:
Typical third-party occurrences
- The homeowner trips on your power saw’s cord and breaks her arm.
- A cabinet your subcontractor installs falls and scuffs the new wall paint.
- You bump into an antique vase, and it shatters on the floor.
Although general liability insurance is essential, this policy will not cover expenses related to injuries or damages caused by inferior workmanship. It excludes damage to property, product and work. For example, you build a shed with low-quality wood, and the roof caves in and damages the client’s antique car stored inside. Your general liability policy will not cover any related expenses, and you will be financially responsible to pay for the damaged property and a new shed.
For examples of how general liability can apply to specific trades, see Concrete Contractors General Liability Insurance.
Purchase a Faulty Workmanship Endorsement
To protect your business, purchase a faulty workmanship endorsement that supplements your general liability policy. Use this endorsement if a client claims you or your subcontractors completed sub-par work or used inferior materials or products.
Covered claims could include
- Deck removal after you fail to obtain the proper building permits before construction.
- New placement of fixture switches you installed in the wrong spots.
- Replacement of the failed HVAC compressor due to improper unit installation.
- Repainting the house after the paint you used deteriorated.
If you want to see how workmanship issues may interact with trade-specific coverage, review trade examples like Interior Construction Tile Work Contractor General Liability Insurance and consider related equipment or pollution exposures such as Machinery Construction Pollution Liability.
Prevent Faulty Workmanship Claims
The right insurance is important, and you can take additional steps to prevent faulty workmanship claims. First, implement a quality control plan that allows you to catch mistakes before your work causes an injury or property damage.
Carefully read and follow the project plans, purchase and use only high-quality materials and products, and make sure the subcontractors you hire are skilled and do their work properly.
Your construction insurance agent can offer additional information about a faulty workmanship endorsement; you can talk to an agent to review your options and limits.
Frequently Asked Questions
What is a faulty workmanship endorsement?
It is an endorsement that supplements general liability to cover certain costs related to repairs or replacement when work quality causes damage or fails to meet standards.
Will general liability cover repairs for poor workmanship?
Generally no; standard general liability excludes damage to your work or product caused by faulty workmanship, which is why an endorsement is useful.
Does the endorsement cover subcontractors’ mistakes?
Many endorsements extend to work performed by subcontractors, but coverage varies by policy and should be confirmed with your insurer.
What steps reduce the chance of a claim?
Use a quality control plan, follow plans closely, use quality materials, and hire qualified subcontractors to lower the risk of workmanship claims.