When you design it as well as build it.
Professional liability for contractors who take on design, design-build or construction management, the part of the job a general liability policy is written to leave out.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched
Building is covered. Designing is a separate question.
General liability is casualty insurance: it responds when your negligence causes bodily injury or property damage to someone else. A design mistake often does neither. It costs money in redesign, delay and rework. And many contractors’ policies carry a professional liability exclusion. One version, CG 22 79, excludes professional services but keeps coverage for construction means, methods, techniques, sequences and procedures. Another, CG 22 80, is intended for design-build contractors and excludes professional services only for construction you didn’t perform or have performed for you. Which one is on your policy changes the answer.
Contractors professional liability is a specialized policy for a contractor’s liability for design errors or omissions. It’s often combined with contractors pollution liability, and it can be written each year for all your operations or for a single project. Design work turns up in ordinary trade jobs too: in California, a licensed contractor may design electrical or mechanical systems for work it will install and supervise. I read the endorsements on your general liability first, then shop the professional coverage to fit what you actually do.
- What it coversClaims over design errors or omissions in services you provide.
- Common pairingOften combined with contractors pollution liability in one form.
- Practice or projectWritten annually for all operations, or for one project.
- The gap it fillsProfessional services exclusions on a contractor’s general liability.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Services: design, design-build, delegated design, construction management or value engineering.
- Revenue: construction revenue and professional fees, separately.
- Designers: licensed staff in-house, or architects and engineers you hire.
- Contracts: a sample contract with its indemnity and insurance sections.
- Current policy: general liability declarations and the list of endorsements.
- History: any design-related claims or disputes.
What California asks of a design-build bidder
California lets local agencies such as cities, counties, certain special districts and transit agencies buy public works by design-build, where both the design and the construction are procured from a single entity. Under Public Contract Code 22162, a local agency needs approval from its governing body, the general authority applies to projects over one million dollars, and it does not apply to projects on the state highway system. The agency may award on low bid or best value.
Section 22161 defines a design-build entity as a legal entity able to provide appropriately licensed contracting, architectural and engineering services. Section 22164 requires the performance specifications and any plans to be prepared by a design professional licensed and registered in California.
To prequalify or short-list bidders, the local agency issues a request for qualifications built on a standard template. Among other items, Section 22164 says the template shall require:
- Evidence that the entity has the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance.
- The licenses, registration and credentials required to design and construct the project, including information on any revocation or suspension.
- Evidence that key personnel have sufficient experience and training, a financial statement, and workers' compensation experience history with a worker safety program.
- A safety record, deemed acceptable when the experience modification rate averages 1.00 or less over the most recent three-year period and the average injury or illness rate and lost work rate fall within the applicable statistical standards for the business category, or when the proposer is party to an alternative dispute resolution system under Labor Code 3201.5.
The entity and its general partners or joint venture members certify the answers under penalty of perjury. The statute asks for evidence of capacity to obtain errors and omissions insurance as a qualification item and does not set an amount. The insurance terms come from the agency's own solicitation and contract, so I read those documents with you before the qualifications are due. Bond questions are covered on California contractor insurance and bond requirements.
When a builder may draw its own plans
Business and Professions Code 6737.3 covers contractors designing the electrical and mechanical systems they install. The Architects Practice Act has its own exemptions, and they matter to builders who draw their own plans.
Under Section 5537, the chapter does not stop an unlicensed person from preparing plans, drawings or specifications for:
- Single-family dwellings of woodframe construction not more than two stories and basement in height.
- Multiple dwellings of no more than four units under the same limits, though not clusters that together form apartment or condominium complexes of more than four units on one lawfully divided lot.
- Garages or other structures appurtenant to those buildings, under the same limits.
- Agricultural and ranch buildings of woodframe construction, unless the building official finds an undue risk to public health, safety or welfare.
If any portion of an exempt building deviates substantially from conventional woodframe framing requirements, the building official must require that portion to be prepared by, or under the responsible control of, a licensed architect or registered engineer, with that person's stamp and signature.
Section 5537.2 says the chapter does not authorize a licensed contractor to design beyond what Section 5537 and the contractors' law allow, unless the work is done by or under the direct supervision of a licensed architect or a professional or civil engineer. Within its license classification, a contractor may still prepare shop and field drawings for work it has contracted or offered to perform, and design systems and facilities necessary to complete that work. It may not use the title architect without the license.
When a builder tells me the plans are its own, I list that as design work on the application. Rules elsewhere vary by state, so check the practice act where the project sits. Home builder exposures are on home builder insurance.
Contractors professional liability, answered
Doesn’t my general liability cover design mistakes?
Often not. General liability is built for bodily injury and property damage to others, and a design error that only costs money falls outside that. Many contractors’ policies also carry a professional liability exclusion, so I read yours before we talk about anything else.
What’s the difference between CG 22 79 and CG 22 80?
Both exclude professional services. CG 22 79 keeps coverage for construction means, methods, techniques, sequences and procedures. CG 22 80 is intended for design-build contractors and excludes professional services only for construction you didn’t perform or have performed on your behalf, so design that’s part of your own construction work isn’t excluded.
Can the coverage be written for one project?
Yes. Contractors professional liability can be written on an annual basis for all of a contractor’s operations, or on a project-specific basis for the design exposure on one job.
Can a California contractor design the systems it installs?
Under Business and Professions Code 6737.3, a licensed contractor may design electrical or mechanical systems for work it will install and supervise within its license classification, and may prepare shop and field drawings for work it has contracted to do. It doesn’t authorize designing work that someone else will install.
Is this the same as an architect’s or engineer’s policy?
No. Contractors professional liability is built for a contractor’s design errors and omissions. Architects and engineers you hire carry their own professional liability, and its limits belong to them.
Do you offer contractors professional liability insurance outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- IRMI: Contractors professional liability insurance
- Construction Risk: The CGL and the professional liability exclusion
- California Business and Professions Code 6737.3: contractor design exemption
- California Department of Insurance: Commercial insurance guide (Form 901)
- Cal. Public Contract Code 22161 (design-build definitions)
- Cal. Public Contract Code 22162 (local agency design-build authority)
- Cal. Public Contract Code 22164 (design-build procurement, qualifications)
- Cal. Public Contract Code 22166 (design-build subcontractors)
- Cal. Business and Professions Code 5537 (Architects Act exemptions)
- Cal. Business and Professions Code 5537.2 (contractor design within classification)
- City of Menlo Park: Submitting a Deferred Submittal
- Permit Sonoma: Deferred Truss Submittals policy
- Cal. Business and Professions Code 6737.3 (contractor exemption, Engineers Act)
Tell me what you design. I’ll shop the coverage.
Your services, revenue split and current general liability declarations are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
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