GL and E&O are different claims
GL answers 'someone got hurt.' Professional liability answers 'the work itself was faulty.' Buying one and assuming it covers the other is the most common uncovered claim we see.
Professional Liability Insurance for Contractors
Design-build, consulting, and the advice you give on a job are not covered by your general liability policy.
California license #6020106
Menlo Insurance Services is the filed name of Opero Labs Inc., licensed by the California Department of Insurance.
Licensed in four states today
California, Texas, Pennsylvania and New York. Applications in Ohio, North Carolina and Michigan are with those states now. We do not quote a state before its license is issued.
Independent brokerage
We hold appointments with multiple carriers, so the quote is shopped rather than served from one shelf.
The gap general liability leaves
General liability covers bodily injury and property damage. It does not cover a claim that the work itself was wrong: a design that failed, advice that cost the client money, a spec you missed.
Design-build widens your exposure
The moment you take responsibility for design as well as construction, you have taken on the design professional's exposure. The coverage has to follow the responsibility.
Contracts are starting to require it
More owners and GCs now demand professional liability limits alongside GL. A broker structures the two so the certificate satisfies the contract.
Written for contractors who carry design or advisory risk, including:
- Design-build general contractors
- Design-assist subcontractors
- Mechanical and electrical contractors doing delegated design
- Fire protection contractors
- Structural steel and precast fabricators
- Curtain wall and glazing contractors
- Solar and energy contractors
- Environmental and remediation contractors
- Construction managers
- Owner's representatives
- Specialty consultants on construction projects
Coverages that go with it
Professional Liability
Errors and omissions for the work itself: a design that did not perform, a specification you missed, advice a client relied on and lost money following. It is written claims made, so the retroactive date on the declarations decides how far back your prior work is covered. Design build and construction management contracts are the usual reason a contractor is asked to carry it.
General Liability
Bodily injury and property damage arising from your operations, which is exactly the claim professional liability excludes. Someone hurt on site, a neighboring property damaged, completed work blamed for a physical loss. Running both policies is how a design build contractor covers the two halves of the same job instead of one of them.
Commercial Umbrella
An umbrella adds limit above the policies its schedule names and pays once those are exhausted. Whether professional liability is one of the scheduled policies is a form question, and on many umbrellas it is not. Contract limits written as a single total figure are the usual reason the layer gets bought at all.
Business Owners Policy
Property and general liability on one form for smaller design and contracting firms: office contents, tools, tenant improvements, and the liability of the premises. It is a packaging decision rather than extra coverage, and it never includes professional liability. Firms outgrow the eligibility as revenue and payroll rise past the carrier's limits.
What changes your premium
There is no flat rate for this coverage. These are the inputs a carrier prices against, and they are the same things the quote form asks you for.
- The share of your work that involves design or professional advice
- Annual revenue and the size of your largest project
- How many licensed design professionals you employ or retain
- The limit and the retention a contract requires
- Your retroactive date and how far back it reaches
- Contract language you routinely sign, including indemnity clauses
- Prior claims and circumstances you have had to report
Questions people ask
I already have general liability. Why would I need this too?
They answer different sentences. General liability answers 'someone got hurt or something got broken'. Professional liability answers 'the work itself was wrong'. A failed design, a missed specification or advice that cost the client money is not a bodily injury or property damage claim, so the general liability policy never engages.
Does design-build really change my exposure?
Yes, and it is the moment most contractors acquire this exposure without noticing. Once you take responsibility for design as well as construction, you have taken on the design professional's standard of care. The coverage has to follow the responsibility, and the contract usually says so before the insurance does.
What is a retroactive date and why does everyone keep asking about it?
Professional liability is usually claims-made, so the policy that responds is the one in force when the claim is made, and only if the work happened after the retroactive date. Let coverage lapse and that date typically resets, which quietly strips protection from every completed project behind you. Preserving the date when we move carriers is a large part of the job.
Does it cover the cost of ripping out and redoing my own work?
Usually not on its own. Rectification or mitigation of a design error may be available by endorsement with some carriers, but the pure cost of your own defective workmanship is generally not insurable. What is insurable is the resulting damage and the client's financial loss.
Can you write this where my business is?
We are licensed in California, Texas, Pennsylvania and New York, and applications in Ohio, North Carolina and Michigan are with those states now. We do not quote a state before its license is issued. Start a quote and we will tell you where you stand before you spend time on it.
What actually happens after I start a quote?
You answer a short set of questions, and a licensed broker at Menlo reads them, maps your operation to a class, and shops it with the carriers we are appointed with. There is no instant bind and no black box. You talk to a person before anything is quoted.
Get it placed by someone who reads the fine print
Start a quote and a licensed broker takes it from there, or talk to one now.