Which type of insurance protects contractors from claims of design errors?

Professional Liability Insurance is specifically designed to protect contractors, architects, engineers, and other professionals from claims arising due to errors or omissions in their design work. When a contractor is involved in creating designs or providing professional advice, they can be held accountable if a client claims that a design error contributed to financial losses or other damages. This type of insurance covers legal defense costs and any settlements or judgments resulting from these claims.

In contrast, other forms of insurance listed do not provide the same level of protection for design-related claims. Worker's Compensation Insurance covers injuries to employees while on the job but does not address design errors. Commercial General Liability Insurance primarily protects against bodily injury and property damage claims that occur during construction activities, but it does not cover professional mistakes or negligence. Directors and Officers Liability Insurance protects company executives from claims related to their management decisions, which is unrelated to the design aspects of construction projects. Overall, Professional Liability Insurance is crucial for safeguarding against the unique risks that come with design responsibilities in construction.