General Liability Insurance for Businesses Interested in Government Contracting

Question: Any advice for purchasing General Liability Insurance for a business interested in government contracting?

Answer: Unfortunately, there is no simple answer for this type of question. In bidding and then winning a government contract, there can so many variables that in order to be properly covered, you should sit down with an experienced insurance professional.

The first question is what kind of service will your company be performing for this government contract? Will it be a professional service, such as consulting, or will it be providing products or construction of some type? If it is a consulting contract, then you will be looking for Arizona E & O Insurance as well as General Liability coverage. Also, what limits will the contract call for, and what additional endorsements will be needed? If you are supplying a product of some kind, it’s extremely important that you have product liability insurance, and the contract will probably require increased limits, which can be provided by obtaining an AZ excess liability or umbrella policy. If your company will be doing construction of some kind, whether it will be a repair, remodel, or new construction, you will need General Liability Insurance, Workers Compensation and Employers Liability Insurance, Builders Risk Insurance, and, quite possibly, an Umbrella or Excess Liability Insurance. If the work is being done on a government installation outside the United States, the contract will most likely require that you provide Defense Base Act coverage, which can be costly. Additional coverages that could be required are Commercial Auto, Pollution Liability, and Cargo Insurance, among others.

Again, the best way is bring the insurance requirements stated in the contract to an experienced insurance broker to review to be sure that you have all the coverages necessary or that you can obtain the required coverages, what the costs of the various coverages will be so you can build them into your quote, and also to receive recommendations for any additional coverages that would protect your company.