Why General Contractors in Illinois Need Professional Liability (E&O) Insurance
Part of our guide to general contractors insurance in Illinois.
You need Professional Liability (E&O) insurance to protect your business from claims of negligence, mistakes, or failure to deliver professional services as promised. General contractors in Illinois face unique risks, including severe winters and plaintiff-friendly courts. Without Professional Liability (E&O), you risk financial loss and damage to your reputation. This coverage is essential for general contractors who work with commercial clients, real estate developers, and lenders. In fact, nearly every commercial client requires general contractors to carry at least $1 million in general liability and workers' compensation insurance as a condition of signing any construction contract.
Professional Liability (E&O) cost for general contractors in Illinois
Illustrative monthly professional liability estimate for a small general contractor operation in Illinois. Actual pricing depends on revenue, payroll, coverage limits, claims history, and carrier. Get a personalized quote to see your real price.
Partner offer · General Contractors in Illinois
Get professional liability (e&o) for your general contractor business in Illinois
Flexible coverage built for general contractors in Illinois — by the job, month, or year. Get a fast online quote with no long-term commitment.
Sponsored · Coverage for general contractors
What Professional Liability (E&O) Covers for General Contractors in Illinois
Professional Liability (E&O) insurance covers claims of negligence, mistakes, or failure to deliver professional services as promised for general contractors in Illinois. This includes claims of faulty workmanship, delays, or failure to meet contractual obligations. For example, if a general contractor in Chicago fails to complete a project on time, the client may file a claim for damages. Professional Liability (E&O) insurance would cover the general contractor's legal fees and any settlements or judgments. However, it does not cover physical damage to property or bodily injury, which would be covered under a general liability policy. In Naperville, a general contractor may face a claim for faulty electrical work, which would be covered under Professional Liability (E&O) insurance.
Do General Contractors in Illinois Need Professional Liability (E&O)?
While Professional Liability (E&O) insurance is not legally required for general contractors in Illinois, it is often contractually required by commercial clients, real estate developers, and lenders. In fact, nearly every commercial client requires general contractors to carry at least $1 million in general liability and workers' compensation insurance as a condition of signing any construction contract. Without Professional Liability (E&O) insurance, general contractors risk financial loss and damage to their reputation. In Aurora, a general contractor may face a claim for negligence, which could result in significant financial losses without Professional Liability (E&O) insurance. Additionally, general contractors who work with government agencies or public entities may be required to carry Professional Liability (E&O) insurance as a condition of contract.
A Real Professional Liability (E&O) Claim a General Contractor Could Face
John, a general contractor in Joliet, was hired to build a new office complex. However, the project was delayed due to faulty electrical work, and the client filed a claim for damages. The client alleged that John's company was negligent in their work and failed to meet the contractual obligations. The claim was for $200,000 in damages, which included the cost of repairs and the loss of business revenue. John's Professional Liability (E&O) insurance covered the legal fees and any settlements or judgments, which totaled $150,000. Without Professional Liability (E&O) insurance, John's company would have faced significant financial losses and damage to their reputation. The claim was settled out of court, and John's company was able to avoid a lengthy and costly litigation process.
What Professional Liability (E&O) Costs for General Contractors in Illinois
The cost of Professional Liability (E&O) insurance for general contractors in Illinois varies depending on revenue, payroll, coverage limits, and deductible. Generally, general contractors can expect to pay $35-$105/month for Professional Liability (E&O) insurance. However, this cost can increase or decrease depending on the specific factors of the business. For example, a general contractor with a high revenue and large payroll may pay more for Professional Liability (E&O) insurance than a smaller contractor. Additionally, the cost of Professional Liability (E&O) insurance may be higher in areas with high risks, such as Cook County and Chicago, which are known for being plaintiff-friendly. In fact, the flooding risk along the Chicago River and in low-lying suburban areas may also increase the cost of Professional Liability (E&O) insurance for general contractors in those areas.
How to Get Professional Liability (E&O) in Illinois
To get Professional Liability (E&O) insurance in Illinois, general contractors should gather their business information, including revenue, payroll, and coverage limits. They should also research different insurance providers and compare quotes to find the best rate. In Chicago, general contractors can find insurance agents who specialize in construction insurance and can provide guidance on the best coverage options. When comparing quotes, general contractors should consider the coverage limits, deductible, and premium. They should also ask about any discounts or incentives that may be available. By having the right information and working with a knowledgeable insurance agent, general contractors in Illinois can find the best Professional Liability (E&O) insurance for their business and compare quotes to find the best rate.
Frequently asked questions
Will my Professional Liability (E&O) premium jump after one claim?＋
Yes. After a claim, your premium may increase, depending on the severity of the claim and your claims history. However, this increase can be mitigated by working with an insurance agent who can help you navigate the claims process and find ways to reduce your premium. In fact, some insurance providers offer premium discounts for general contractors who have a good claims history or who participate in risk management programs.
Can I get a COI same-day for a client?＋
Yes. Many insurance providers offer same-day COIs for general contractors in Illinois. However, this may depend on the specific requirements of the client and the insurance provider. In fact, some insurance agents specialize in providing same-day COIs for general contractors and can help you meet the requirements of your clients.
Does a sole proprietor need Professional Liability (E&O) insurance?＋
Yes. As a sole proprietor, you are personally liable for any mistakes or negligence that may occur on the job. Professional Liability (E&O) insurance can protect you and your business from financial loss and damage to your reputation. In fact, many commercial clients and lenders require sole proprietors to carry Professional Liability (E&O) insurance as a condition of contract.
What is not covered under Professional Liability (E&O) insurance?＋
Professional Liability (E&O) insurance does not cover physical damage to property or bodily injury, which would be covered under a general liability policy. It also does not cover intentional acts or criminal behavior. Additionally, Professional Liability (E&O) insurance may not cover claims that are related to a breach of contract or a dispute over payment.
Can I cancel my Professional Liability (E&O) insurance at any time?＋
Yes. You can cancel your Professional Liability (E&O) insurance at any time, but you may be subject to a penalty or fee. In fact, some insurance providers offer flexible cancellation policies that allow you to cancel your insurance without penalty.
Partner offer · General Contractors in Illinois
Ready to cover your general contractor business in Illinois?
Flexible coverage built for general contractors in Illinois — by the job, month, or year. Get a fast online quote with no long-term commitment.
Sponsored · Coverage for general contractors
Other coverages general contractors in Illinois should know
This article is for general educational purposes and is not insurance or legal advice. Coverage requirements and pricing in Illinois change over time and vary by business. Verify current rules with the Illinois Department of Insurance and a licensed agent before purchasing a policy.