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Facts About General Liability Insurance for Contractors in Tennessee Part 1

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General liability insurance helps minimize the financial backlash that often comes as a result of third-party lawsuits involving property damage, workplace injuries, reputational injuries, and construction/installation issues (i.e., completed products coverage).

For contractors in Tennessee, general liability insurance is mandatory. Failure to obtain an appropriate policy could result in severe legal complications and fines. To learn more about which types of insurance you need to protect your contracting business, consult the Nashville contractor attorneys at Cotney Construction Law.

Why General Liability Insurance is Important

General liability insurance coverage is required by almost every business in Tennessee, so there’s little reason for a contractor to pursue work without it. General liability insurance covers the cost of lawsuits related to property injury or bodily harm caused by negligence on the project site. This applies to the contractor and their workforce.

When you are sued by a third-party, general liability insurance absorbs the cost of legal fees, settlement costs, damages, and more. An accident involving a third-party may have occurred on your project site without your knowledge. Fortunately, general liability insurance makes it so that you can continue working without worrying about a lawsuit popping up on the horizon.

Important Definitions

Before we cover some important facts about general liability insurance for contractors in Tennessee, in part two, we should clarify some of the terminology that will be used in this article.

  • The term “applicant” refers to an individual or entity who applies for a contractor license. This applies to applicants for both the home improvement contractor license and the general contractor license.
  • The term “board” refers to the Board for Licensing Contractors which was created as a result of Tenn. Code Ann. § 62-6-104.
  • The term “general liability insurance” refers to any insurance policy that covers negligent acts or other acts performed by the principal insured as well as any agents or employees of the principal insured.
  • The term “licensee” refers to an individual or entity that has obtained their home improvement contractor or general contractor license through the Board for Licensing Contractors.

In part two, our Nashville contractor attorneys will delve into the specifics regarding the amount of insurance required by law for contractors in Tennessee as well as various stipulations related to proof of insurance.

If you would like to speak with a Nashville contractor attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.