Faulty workmanship doesn’t just cause headaches on the jobsite. It also creates one of the most misunderstood exposures among artisan contractors. Too often, brokers and clients rely on general liability alone, not realizing it excludes many workmanship-related claims. That’s where errors and omissions (E&O) coverage comes into play. When you understand how professional liability coverage applies — and when it doesn’t — you can protect your clients from coverage gaps that may not surface until after the work is done.
Why General Liability Isn’t Enough
General liability (GL) policies are designed to protect against third-party injuries and property damage, not the insured’s own defective work. That’s where many contractors get caught off guard. Incorrect design and workmanship deficiencies are among the leading causes of construction disputes, particularly in residential and small commercial construction. That makes the faulty workmanship gap far more than a theoretical concern.
Most GL policies based on ISO form CG 00 01 exclude coverage for “damage to your work,” which means contractors may be left paying out of pocket when they have to redo faulty craftsmanship. Some policies offer a resulting-loss exception, which restores coverage for damage caused by faulty work, but not the faulty work itself. As IRMI notes, this exclusion “effectively eliminates coverage for the cost of repairing or replacing the insured’s own faulty work.”
Brokers need to recognize the risk exposures for artisan contractors and help clients structure coverage that aligns with how they actually work.
What E&O Can Cover and What It Doesn’t
E&O insurance is built to respond when the problem stems from professional services such as design, project oversight, specification errors, or failure to meet contractual standards tied to performance. This aspect of coverage is especially relevant for artisan contractors who now work under design-build models, performance-based agreements, or subcontractor roles with indirect oversight responsibilities.
E&O coverage may respond when:
- A contractor installs work based on incorrect specifications
- Professional oversight fails and leads to delays, change orders, or rework
- Advice or consultation results in financial harm, even without property damage
But the policy won’t cover every mistake. If the failure results purely from poor craftsmanship with no professional service component, E&O likely won’t apply. That’s why it’s essential to understand the client’s role, responsibilities, and contract scope. Knowing where the coverage starts and stops helps you set realistic expectations and avoid disputes at claim time.
Faulty Workmanship in the Real World
Let’s look at how these coverage gaps could play out:
- Tile contractor: A contractor used a standard adhesive on a heated bathroom floor, unaware it couldn’t withstand the temperature. Weeks later, the tiles cracked and lifted. General liability covered minor subfloor damage, but not the cost to tear out and replace the work. Claim cost: $14,000.
- Electrician: In a commercial renovation, an electrician ran wire with the wrong gauge. The mistake delayed occupancy after the job failed inspection and required full rework. No third-party damage occurred, so GL didn’t respond. E&O may have, depending on classification. Claim cost: $21,500.
- Masonry subcontractor: A retaining wall collapsed due to improper compaction, damaging a nearby parked vehicle. GL covered the car, but not the wall itself. The subcontractor bore the full cost of rebuilding. Claim cost: $38,000.
Each of these claims highlights the need to match coverage to how work is actually performed. When you identify those exposures early, you help prevent costly surprises.
Building Smarter Coverage Strategies
Protecting an artisan contractor takes more than a basic GL policy. You build stronger strategies by combining protections that address how work gets done — from the tools used to the liability assumed.
- Use contractor insurance programs that address tools, job-site exposures, and workmanship-related liability.
- Recommend professional liability coverage for clients involved in design-build work or trades where specifications and performance standards matter.
- Don’t overlook supplemental protections like property coverage for tools or inland marine for mobile operations.
Cochrane & Company works with markets that offer E&O coverage, including faulty workmanship protection for many artisan classes. That flexibility allows you to structure programs that match your client’s real exposures, not just the assumptions they walk in with.
Helping Clients Stay Ahead of the Problem
Faulty workmanship doesn’t always create visible damage. Sometimes it shows up as failed inspections, delays, rework, or lost income. When that happens, your client will look to you for answers.
Ask questions that uncover what basic coverage might miss:
- Does your client oversee subcontractors whose work they’re responsible for?
- Do they offer design input, even without sealed plans?
- Do they specify or select materials for projects?
- Could their work fail after close-out, when warranties or GL protections have lapsed?
If the answer to any of these is yes, they may need E&O coverage designed to respond when craftsmanship alone doesn’t.
When you surface these blind spots, you build insurance strategies that reflect how your clients operate. That’s the difference between placing a policy and protecting a business.
Cochrane & Company helps you navigate these decisions and place flexible artisan insurance coverage that reflects today’s job-site realities. If you’re ready to revisit how professional liability coverage fits into your clients’ contractor insurance programs, we’re here to help.
About Cochrane & Company
For more than six decades, Cochrane & Company has been proudly at the forefront of the insurance industry. Our experience has enabled us to innovate in powerful ways, reimagining the E&S market, and providing technology solutions that make it easy to do business with us. Licensed in all 50 states, we proudly serve clients across the nation, providing personalized and powerful solutions to help you become an even better partner for your clients. Speak to one of our experienced professionals today by calling (855) 967-0069.
