Construction Professional liability (CPL) insurance is a type of insurance that provides coverage for businesses against claims that arise due to errors and mistakes in construction work. It comes under the category of protection for injuries and damages due to day-to-day construction operations.  Â
Purpose of Construction Professional Liability Insurance (CPL)
A CPL insurance provides financial protection when errors or mistakes occur, and the client is dissatisfied with the work performed. The claim from the client can be incurred due to:
- Work errors
- Incomplete delivery of work
- Negligence of work Â
A contractor may hire third-party contractors to handle different aspects of projects. Hence, CPL insurance protects contractors from mistakes and losses made by third-party vendors. Â
CPL insurance is a life saver for large construction firms who are associated with critical facility management in construction, like multiple in-house services like home design. Â
What does Professional Liability Insurance Cover and not Cover?
CPL
Insurance Covers |
CPL
Insurance does not Cover |
Work Errors and Mistakes |
Those liabilities that are
covered under Commercial General Liability Policy (CGL) Â |
Failure to do Work
Performance |
Property damage |
Uncompleted Work |
Bodily Injuries |
Negligence |
Personal and advertising
injury |
Misrepresentation |
Intentional and illegal
acts |
Violation of good faith and
fair dealing |
 |
Inaccurate Advice |
 |
Features of Construction Professional Liability Insurance (CPL)
- that covers all the work that a contractor performs ( standing professional liability insurance policy) or as
- that covers specific projects with finite time frames.
Cost of Professional Liability Insurance
- Type of business
- Industry
- Coverage limits
- Location
- Number of employees