Does general liability cover damage to a client's property I'm working on?

Does general liability insurance cover damage to a client's property I am working on?

Most of the time, no. Damage to a client's property that is in your care, custody, or control while you are working on it falls outside the coverage a standard general liability policy provides. This gap catches contractors off guard more than almost any other policy limitation.

What is the care, custody, and control exclusion?

The reason sits in a clause called the care, custody, and control exclusion. It appears in most standard general liability forms. General liability coverage is built to pay for harm you cause to property you do not control: an adjacent structure accidentally struck during your work, a neighbor's fence clipped by your equipment, a passerby's vehicle damaged by falling debris. Property you are actively handling is treated differently. Because you have direct responsibility for that property by virtue of the job itself, the insurer removes it from the policy's scope.

For example, a Georgia remodeling contractor is hired to refinish a homeowner's hardwood floors. During the work, a sander slips and gouges a section of floor, causing $6,000 in damage. The contractor's general liability policy excludes the claim because the floors were in the contractor's care, custody, and control at the time of loss. The contractor absorbs that cost out of pocket. Had the same contractor accidentally broken a window on a neighboring structure, that damage, to property outside their direct control, would likely be covered by the same policy.

Which trades face this exclusion most often?

The exclusion applies broadly across trades. Plumbers working on existing pipes, electricians rewiring panels, roofers replacing decking, painters handling fine woodwork: all face the same limitation. The property being worked on is not covered. Property surrounding the job site generally is.

For example, a plumber who cracks a homeowner's antique tub while re-routing drain lines would find that claim excluded because the tub was in the plumber's hands at the moment of damage. Water damage that spreads to an adjacent wall during the same job could fall under the general liability policy, depending on how far removed from the direct work the damage traveled.

What coverage fills the gap left by this exclusion?

Several coverage types address this gap:

• Installation floater: covers materials and property in your care during installation or construction, including damage that occurs before the work is handed off to the client.
• Contractors professional liability: responds to claims that your work, or a failure in it, caused financial harm to a client; often paired with general liability for broader protection.
• Bailee's customer coverage: designed for businesses that take possession of a customer's property to perform a service, such as furniture restorers, appliance repair shops, or equipment servicing firms.

How do I find out which coverage fills this gap for my trade?

Which of these applies depends on trade, contract structure, and how property passes between client and contractor. A coverage review with a licensed advisor can identify exactly where your current policy leaves this gap open and which policy fills it.

Request a free coverage review and our team will walk through your contractor coverage line by line.