Many contractors assume their general liability (GL) insurance provides broad protection for their operations, but industry experts warn that this belief can expose companies to costly uninsured losses. While GL policies are often viewed as a safety net, they frequently exclude professional services and pollution-related risks—two exposures that are becoming more common across construction projects.
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“These exclusions can create major coverage gaps for contractors making daily decisions in the field,” said Kaitlyn Dudzinski, VP, Design and Construction Professionals at Westfield Specialty.
“This is one of the biggest questions that comes up when contractors are thinking about buying insurance: ‘I buy general liability insurance, so why should I buy pollution or professional liability?'” Dudzinski said. “First and foremost, your general liability coverage is likely going to have an exclusion for any professional services that you provide.”
General liability policies are designed to cover bodily injury and property damage, but they are not structured to protect against errors tied to professional judgment. Contractors who rely solely on GL coverage may be surprised to learn that professional liability is almost always excluded.
“They very rarely are able to get language that reinstates coverage for a subset of excluded risks on policies with very small sublimits and very limited coverages,” Dudzinski said. “That occurs only on certain classes of risks, with certain carriers. It’s not widely available.”
Many contractors mistakenly believe professional liability applies only to licensed design professionals, but exposure extends far beyond stamped drawings.
“What I think contractors often overlook is how their delegated design decisions, value engineering, and field changes affect the overall design,” Dudzinski said. “For example, they may move an HVAC system because mechanical equipment is in the way. The design documents show it in one location, but it ends up being moved 10 feet, effectively changing the design.”
Even minor adjustments can create professional liability exposure because they rely on expertise, qualifications, and judgment.
“That’s a professional liability exposure they often don’t realize they have,” Dudzinski said. “They may think, ‘This isn’t professional liability, I’m not stamping a design.’ But because they’re giving a professional opinion and making changes based on their qualifications, experience, and contractor’s license, this would be considered a professional liability exposure.”
Professional liability differs structurally from general liability coverage, which is typically written on an occurrence basis.
“It’s very difficult to cover professional liability on an occurrence basis because it’s hard to pinpoint when the error actually occurred,” Dudzinski said. “Design work happens over time, with multiple changes made throughout a project, so it’s rarely clear exactly when the error was introduced. That’s why most professional liability policies are written on a claims-made or claims-made-and-reported basis.”
Because of the claims-made structure, timely reporting is critical—even when contractors are unsure whether an issue will evolve into a formal claim.
“What we tell contractors, and what brokers and agents should tell their contractors, is if you think that this could potentially be a professional liability claim, you should report it as a circumstance,” Dudzinski said. “All that means is you’re letting the insurer know something happened. You may not know anything else other than that, but you’re putting them on notice.”
Concerns about premium increases often discourage early reporting, but those fears are frequently overstated.
“Generally, that’s not the case in professional liability,” Dudzinski said. “That may occur with respect to some of the personal lines, but in the professional liability space, it’s usually the paid claims, when something goes wrong and there was an identifiable error, which most likely will impact your premium.”
Early communication can also trigger carrier support before a claim escalates.
“We’d just rather know upfront, one, that there’s potentially something going on that could result in a claim. And two, we want to jump in and help the insured if we can as soon as possible,” Dudzinski said. “The other thing is we’re going to reach out to the insured’s general liability carrier and start working with them right away so we can help in that process as well.”
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Dudzinski emphasized that formal sign-offs on field changes can significantly reduce claim severity.
“In those instances when it’s signed off by someone, the claim typically results in a lower payment, and it’s a much better outcome than when contractors just make the change,” she said.
When selecting carriers for professional and pollution liability coverage, expertise across both disciplines is critical.
“I think the most important factor to consider in selecting a carrier is whether it has experience in both the professional and the pollution side of things,” Dudzinski said.
At Westfield Specialty, professional and pollution expertise are managed by dedicated leaders, allowing underwriters to evaluate risks from multiple perspectives.
“We have both, professional liability and pollution coverage expertise so you can get the best of both disciplines,” Dudzinski said.
Collaboration plays a key role in underwriting consistency.
“Our team gets together three times a week, and we talk about risk,” Dudzinski said. “Our underwriters, get to bring risks to these calls and hear how we think about and how we would approach the risks from both the pollution and profession liability viewpoints.”
Dudzinski noted that Westfield Specialty aims to strike a balance between speed and customization.
“Westfield Specialty falls somewhere in the middle,” she said. “We look at all sizes of risk, and we strive to be efficient for small contractors and customize coverages for all potential insureds where it makes sense. We also try to be as consistent as possible.”
For contractors navigating increasingly complex insurance landscapes, understanding where general liability ends—and where professional and pollution coverage begins—can be the difference between a manageable claim and a costly surprise.
Originally reported by R&I Editorial Team in Risk And Insurance.
