Virginia Contractor General Practice Test 2025 – Complete Exam Prep

General liability insurance is essential for contractors engaged in demanding projects because it provides coverage for claims related to bodily injury, property damage, and personal injury that may arise during the course of their work. This type of insurance protects the contractor's financial assets against potential lawsuits that could arise from accidents or mishaps on the job site.

In difficult or high-risk projects, the likelihood of incidents increases, making general liability a critical component of risk management. For instance, if a worker or a bystander is injured while work is being performed, general liability insurance can cover medical expenses and legal fees associated with any claims brought against the contractor.

While builder's risk insurance, workers' compensation, and property insurance are also important, they serve different purposes. Builder's risk primarily covers damages to the project itself during construction, workers' compensation provides coverage for employee injuries, and property insurance covers damages to owned property. However, general liability insurance directly addresses third-party claims, which is a significant risk for contractors in the construction industry.