Revisiting General Liability Insurance for Canadian Contractors

A number of months ago I posted the attached construction focused paper entitled How Much General Liability Insurance is Enough. It received favourable feedback but I felt it necessary to do a re-release as I continue to meet contractors that buy the minimum amount of liability insurance mentioned in standard construction contracts, despite words like “not less than” that potentially increase contractors exposure to risk.

Liability exposure cannot be easily quantified as there are no real measurable criteria to determine exposure to liability claims, except the depth to which a contractor is willing to conduct a project risk assessment and the contractor’s expertise. So, although a contract insurance specification may say for example “not less than $5,000,000 per occurrence” even on a very small project the actual exposure could be multiples of this amount. Failing to recognize that risk exists in contract and physically and to quantify as best as possible those risks, could be perilous.

This paper is general in nature and cannot and should not be depended upon for specific projects or situations. It is also Canadian and intended for reference within Canada only.

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