Contractors General Liability for Retail Agents
Contractor general liability is one of the most common reasons retail agents turn to the surplus lines market. Admitted insurers often have narrow appetites for construction: they may decline certain trades, residential or new-construction work, contractors with limited years in business, or accounts with prior claims. Sterling Insurance Services helps licensed retail agents find markets that may consider these risks.
This page explains which contractor risks commonly end up in the E&S market, what insurers look for, and what to include when you submit.
Contractor risks that commonly need a specialty market
Every insurer's appetite is different and changes over time, but agents often come to a wholesaler with:
- •Residential and new-construction work, including tract, custom-home and condominium projects
- •Higher-hazard trades such as roofing, framing, excavation, demolition, concrete and structural work
- •General contractors who subcontract most of their work
- •New ventures or contractors with limited years in business under the current entity
- •Accounts with loss history that falls outside standard guidelines
- •Higher limits or project-specific requirements from a general contractor or project owner
Whether a market will consider a particular risk depends on the details, so send a complete submission even when you are unsure.
What surplus lines contractor policies can look like
Contractor GL policies in the E&S market often differ from admitted forms. Review quotes carefully with your client for features such as:
- •Exclusions tailored to the class, for example residential, height, EIFS, subsidence, or work in specific project types
- •Subcontractor conditions requiring written contracts, hold-harmless agreements, additional insured status and certificates with minimum limits from subs
- •Classification limitations, where coverage applies only to the operations described on the application
- •Minimum earned premium, meaning part of the premium is not refundable if the policy is cancelled
- •Auditable premium based on revenue, payroll or subcontracted costs
None of these is unusual in the E&S market, but each matters to your client. Understanding them up front avoids surprises at claim or audit time.
What insurers look for in a contractor submission
Operations. A clear description of the work by percentage: residential vs. commercial, new construction vs. remodel or repair, interior vs. exterior, and maximum height or depth.
Subcontractor practices. Whether the contractor uses written subcontracts, collects certificates of insurance, and requires additional insured status and minimum limits.
Experience. Owner and key staff experience in the trade, and years in business.
Exposure. Current and projected gross receipts, payroll, and subcontracted costs.
Loss history. Five years of currently valued loss runs, with explanations for significant claims.
Contracts. Sample contracts, especially indemnity and insurance clauses from the general contractors or owners the insured works for.
Why contractor submissions stall
The most common reasons a contractor GL submission slows down are easy to fix before you send it. Operations are described too vaguely, such as "general construction" with no percentages. Loss runs are missing or out of date. Subcontracted costs are left out, even though many insurers rate on them. Or the contract requirements the insured has to meet arrive only after a quote is issued, which can mean starting over. A complete package the first time gives the risk its fairest review.
Submission checklist for contractor GL
- •Completed ACORD 125 and 126, plus a contractor supplement
- •Description of operations with percentages by type of work
- •Gross receipts, payroll and subcontracted costs, current and prior years
- •Five years of currently valued loss runs
- •Current or expiring declarations page and expiration date
- •Subcontractor agreement and certificate practices
- •Any project-specific or contract insurance requirements, including limits, additional insured wording and waiver of subrogation
- •A short narrative explaining why the risk needs a specialty market
Related coverage
Contractors often need more than GL. Through Sterling you can also submit related lines listed on our Products page, including commercial auto, excess liability, inland marine for tools and equipment, and builders risk, subject to market availability.
Frequently asked questions
Coverage descriptions are general summaries only. Availability, terms, limits, and pricing vary by insurer and state and are subject to underwriting. The policy, not this website, governs coverage.
Some coverage placed by Sterling Insurance Services LLC is written by nonadmitted ("surplus lines") insurers. Nonadmitted insurers are not licensed by the state where the insured is located and are not subject to that state's financial solvency regulation and enforcement. They do not participate in state insurance guarantee funds, including the California Insurance Guarantee Association, so those funds will not pay claims if the insurer becomes insolvent. Surplus lines placements are made only where permitted by law, after any required diligent search of admitted insurers, and are subject to surplus lines taxes, stamping fees, and state filing requirements. Required state notices (for example, the California notice under Insurance Code §1764.1) are provided with applications and policies.
Sterling Insurance Services LLC is a wholesale insurance brokerage. We work only with licensed insurance agents and brokers and do not sell insurance directly to the public. If you are a business owner or consumer looking for coverage, please contact a licensed retail insurance agent or broker.