A common exclusion pertains to residential construction, says Deanna Napier, senior vice president at Van Gilder in Denver. "A lot of commercial contractors are surprised to learn a residential exclusion can include military barracks, senior care centers and mixed-use properties. They start a project and then learn that they don't have coverage," she says.

Sharkey adds that contractors working in the East should be aware of the rise in third-party "action-over" claims that have created additional financial risk for contractors and their insurers. For example, an employee of a subcontractor injured at a jobsite can file a suit against the general contractor alleging that the jobsite was not safe. In this case, the GC would be the third party being sued because the subcontractor's employee cannot sue his employer directly for a work-related injury if he is collecting workers' compensation. A general liability policy with an action-over exclusion would not cover the claim, leaving the GC exposed. "Also, design-build contractors face unique exposures, as CGL policies generally exclude errors-and-omissions liability, which often ties into design issues," Napier says.

Key Exclusions to Monitor

• Amendment to the terms governing known injury or damage (e.g., first manifestation) and/or continuing and progress damages, which may affect how losses are allocated and thus restrict coverage limits that would otherwise be available.

• Amendment to the definition of “insured” contract, which may affect the extent of contractual liability coverage afforded under the CGL policy.

• Removal of the exception to “your work” exclusion, which narrows the scope of coverage afforded by eliminating an important standard exception where the damaged work, or the work out of which damages arises, was performed by a subcontractor.

• Wrap-up exclusions, which may be overly broad so as not to align with exposures that are not afforded coverage under a wrap-up program.

• Residential work exclusions, particularly how “residential” is defined (hotel, apartments, mixed-use, etc.)

• Manuscript additional insured endorsements that may not comply with contract requirements.