What General Liability Actually Covers for Excavation Contractors

THE THREE THINGS GL IS BUILT TO PAY FOR

Bodily injury. If a third party, a delivery driver, an inspector, a passerby, gets hurt because of your operations, GL is the policy that responds. This does not cover your own employees; that’s what Workers’ Compensation is for. GL is strictly a third-party policy.

Property damage. This is the big one for excavation. Crack a neighbor’s foundation while digging a basement, sever a fiber line, collapse part of a retaining wall on an adjacent lot, all of that falls under property damage. It’s also the category most affected by the exclusions and sublimits discussed below.

Completed operations. Excavation damage doesn’t always show up while you’re still on site. A backfilled trench can settle for months. Completed operations coverage is what responds when a claim surfaces after the job is finished and the crew has moved on, which is exactly the kind of long-tail exposure excavation work creates more than most trades.

STANDARD LIMITS AND WHAT THEY MEAN ON A BID

Most GL policies are structured around $1 million per occurrence and $2 million aggregate. “Per occurrence” caps what the policy pays for any single incident; “aggregate” caps the total the policy will pay across all claims in the policy period. For a smaller residential job, $1M/$2M is usually plenty. For a commercial GC subcontract or municipal job, you’ll frequently see requests for higher limits or an Umbrella policy stacked on top, because the potential severity of an excavation claim (a utility strike affecting an entire city block, for instance) can exceed a standard limit fast.

WHAT GL DOES NOT COVER

GL is not a catch-all. It doesn’t cover damage to your own equipment (that’s Inland Marine or Equipment coverage), it doesn’t cover your own vehicles (Commercial Auto), and in most standard forms it excludes pollution outright, meaning a fuel or hydraulic fluid leak, or contaminated soil disturbance, needs its own Pollution Liability policy to be covered at all. It also typically doesn’t cover injuries to your own workers, which is Workers’ Compensation’s job. Knowing where GL’s job ends is just as important as knowing what it covers, because that’s where contractors get exposed: assuming one policy is doing a job it was never written to do.

Head back to the General Liability Insurance for Excavation Contractors hub, or go deeper on Utility Strike Claims and Your GL Policy and Trench Collapse and Cave-In Liability Coverage.