What is the purpose of general liability insurance for home improvement contractors?

General liability insurance is essential for home improvement contractors as it aims to protect against claims of bodily injury or property damage that may arise during the course of their work. This type of insurance covers legal fees, medical costs, and settlements associated with incidents where a contractor's work leads to injury or damage to a third party or their property.

For example, if a contractor accidentally causes damage to a client's home or a visitor gets injured on the job site, general liability insurance serves as a financial safety net, ensuring that the contractor can handle the ensuing claims without facing severe financial hardship. This coverage is crucial in an industry where physical work can lead to unforeseen accidents and liabilities.

In contrast, health coverage for workers pertains to a different type of insurance, while theft of tools and equipment falls under a specific property insurance policy, and compensating clients for dissatisfaction would involve different types of service agreements or warranties rather than liability insurance. Therefore, the purpose of general liability insurance is distinctly focused on managing the risks associated with injuries and property damage.