Managing contractor general liability exposures

Contractors in various specialties, such as carpentry, masonry, concrete, fencing, landscaping, flooring, HVAC, and electrical, are exposed to several general liability issues when working on a customer job site. If business owners and employees do not actively address potential liability problems, they can result in customer or visitor injuries, property damage, and damaged or stolen equipment. In addition, losses of any type can negatively impact your business financially and cause damage to your reputation with existing and potential customers.

This article addresses two areas of general liability: 1. Job site premises and operations; and 2. Products and completed operations. The following lists include considerations to assist you in preventing losses from liability exposures and managing hazards while working on a job site. However, keep in mind that these lists are not comprehensive and do not include all potential hazards, so continue to practice diligence in securing all work sites.

Job site premises and operations
The most common liability losses while working on a job site are slips, trips, and falls, property damage, and bodily injury. Think about which of the following items can be applied to your next worksite.

  • Workers are experienced, skilled, and licensed (if applicable)
  • Newer employees are closely supervised by more experienced workers
  • Good housekeeping is maintained throughout the premises at all times
  • Floors, aisles, and hallways are kept clear of debris
  • Spills are cleaned up right away
  • Floors, parking lots, and sidewalks are in good condition, well-lit, and do not have cracks or unanchored coverings
  • Stairways are in good condition, well-lit, and have proper handrails
  • Tools and materials are neatly arranged and do not obstruct walkways
  • Tools are removed from the site at the end of each day; tools left overnight are stored securely in a locked space
  • Materials and equipment left overnight are stored appropriately
  • Job sites left unattended by workers are free from hazards and properly secured
  • Exits from the premises are unobstructed and clearly marked
  • Access to the premises is limited to necessary personnel while operations are performed
  • Customers or visitors permitted to enter work areas are accompanied by a qualified employee at all times and required to wear personal protective equipment when needed
  • Customers are prohibited from climbing ladders, touching or holding tools or equipment, and assisting in work performed by employees
  • Customers and visitors are informed of potential hazards and are aware that children and pets are prohibited from entering the work site
  • Noise from tools and machinery is limited as much as possible
  • Worksites are inspected regularly to identify and control hazards

Products and completed operations
Liability losses caused by products and completed operations can include anything from bodily injury to property damage. Common causes are poor workmanship, failure to meet specifications or building codes, use of substandard materials; incorrect installation, maintenance, or repair operations, faulty equipment; and improper design. The list below demonstrates actions that can reduce the potential for liability issues.

  • Raw materials and component suppliers meet strict quality standards
  • Incoming materials, components, and equipment are thoroughly inspected, and items that fail to meet standards are refused
  • Shipping and receiving records maintained so that any defective materials can be traced back to their original suppliers
  • The business has quality control measures in place to make sure all work meets minimum levels of acceptability and work is done competently by employees
  • If the company offers guarantees or warranties to customers, they are in writing prior to starting the job
  • Local building codes, regulations, and ordinances are investigated prior to performing any installation procedures
  • Equipment installations follow all of the manufacturer’s instructions
  • Workers performing maintenance operations follow a procedural checklist to ensure no steps are missed
  • The business has procedures for inspecting work when it is completed
  • Debris, tools, raw materials, and other equipment is removed from the job site when work is completed, so no hazardous items are left behind
  • Detailed customer records are kept that include all work completed along with service and maintenance intervals (if applicable)
  • Customers are provided information regarding the proper operation and maintenance of installed equipment, materials, etc.

Source: AM Best

This document is intended for general information purposes only, and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. This document can’t be assumed to contain every acceptable safety and compliance procedures or that additional procedures might not be appropriate under the circumstances. Markel does not guarantee that this information is or can be relied on for compliance with any law or regulation, assurance against preventable losses, or freedom from legal liability. This publication is not intended to be legal, underwriting, or any other type of professional advice. Persons requiring advice should consult an independent adviser. Markel does not guarantee any particular outcome and makes no commitment to update any information herein, or remove any items that are no longer accurate or complete. Furthermore, Markel does not assume any liability to any person or organization for loss of damage caused by or resulting from any reliance placed on that content.

*Markel Specialty is a business division of Markel Service, Incorporated, the underwriting manager for the Markel affiliated insurance companies.
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