Contractual Liability Limitation

The Contractual Liability Limitation Endorsement takes away coverage for liability that may be assumed under a construction contract between a contractor and another contractor (ex: contract between general contractor and subcontractor) or a project owner.

Most of these construction contracts contain a provision known as a hold harmless or indemnification clause. These clauses require the contractor signing the contract to assume liability that may ordinarily belong to another party.

The Contractual Liability Limitation Endorsement can result in a significant coverage reduction for those contractors that enter into written construction contracts.