Owners and Contractors Protective Liability Insurance: Cost & Quotes From $69/mo

For your best business protection and savings, we recommend bundling GL with some other important coverages on one Business Owners Policy!

For your best business protection and savings, we recommend bundling GL with some other important coverages on one Business Owners Policy!

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A recent report found that the cost of construction disputes dramatically increased in 2020. They went from $30 million in 2019 to $54 million in 2020. The commercial construction industry has also seen an increase in so-called “mega disputes,” which involve large private projects. These disputes happened despite an overall decrease of construction spending according to the Census Bureau.

Workplace injuries account for 21,400 nonfatal workplace injuries in 2021. The Center for Disease Control does not paint a much better picture, with construction fatalities outpacing employment growth for some worker groups.

In this environment in increased construction disputes, it is more important than ever to be protected from liability. Owner's & contractors protective liability insurance is one tool that owners and general contractors have in their tool belts to protect themselves from excessive liability costs.

In this article, you will learn the answers to basic questions to make an informed decision about the best owners & contractors protective liability policy for you. These questions will include the following:

  • Definition of owners and contractors liability insurance

  • How the policy works

  • How much it costs

  • The best companies

What is Owner and Contractor’s Protective Liability Insurance?

Owners and contractors protective liability insurance is a stand-alone policy that helps cover project leads and general contractors from liabilities due to work done by contractors or subcontractors, often in the construction industry. 

As mentioned, this type of protective liability insurance is meant only to protect one party, which is usually the contractor or the owner. These insurance contracts are generally project specific, making them separate from any general liability coverage. An owner or contractor will still usually need to purchase additional types of insurance to operate a project while avoiding liability.

Differentiating Owner and Contractor’s Protective Liability, Railroad Protective Liability, Project Management Protective Liability, and Protective Professional Indemnity

Because owners & contractors' protective liability coverage is a separate policy, it is often purchased in conjunction with other necessary insurance policies. Below is how owners protective liability coverage differs from other similar policies.

PolicyHow it WorksHow it Differs from OCP
Owner and Contractors Protective Liability (OCP)Bodily Injury and Property Damage liability from contractors or subcontractorsN/A
Railroad Protective Liability (RPL)Railroads are riskier for typical contractor liability policies, so this policy fills in the gap in coverage from a regular policy. The Code of Federal Regulations requires that railroad projects include a railroad insurance protective liability insuranceBroader coverage for railroad acts and omissions. Eliminates vicarious limits often in OCP from contractor workers
Project Management Protective Liability (PMPL)Remedies additional problems that can arise during specific projects not covered by OCP. There is no standard form and is tailored and applied on a per-project basisEmphasis on general supervision activities, which include preparing drawings and designs and taking control of subcontractor operations
Owners Protective Professional Indemnity (OPPI)Adds supplemental coverage for professional errors and omissions claims.Allows policyholders to exceed policy limits that can hold OCP insurance back