Florida General Contractor Practice Exam

What type of liability insurance is essential for contractors working with subcontractors?

1. General liability insurance

2. Auto liability insurance

3. Errors and omissions insurance

4. Professional liability insurance

The correct answer is: General liability insurance

General liability insurance is essential for contractors working with subcontractors because it protects against claims of bodily injury, property damage, and personal injury that may arise during the course of construction projects. When contractors hire subcontractors, they are typically responsible for the actions and negligence of those subcontractors while they are performing work on their behalf. This form of insurance helps ensure that the contractor is covered in case a subcontractor causes damage to a third party or their property, or if someone is injured as a result of the work being done. This coverage not only protects the contractor financially but also helps to maintain a professional reputation by demonstrating that the contractor is adhering to industry standards and best practices in risk management. In contrast, auto liability insurance is specifically related to vehicle use and does not cover construction-related incidents. Errors and omissions insurance is typically reserved for professionals who provide services or advice, and would not be the primary insurance needed for physical construction work. Professional liability insurance pertains to negligence related to professional services rather than coverage for physical damages or injuries common in construction.