If a contractor has a Commercial General Liability policy with a $1,000 deductible and faces $2,000 in code violations, who is liable for the costs?

In this scenario, the contractor is held liable for the costs associated with the code violations because they are responsible for ensuring that the work is completed in compliance with local building codes. A Commercial General Liability (CGL) policy typically protects the contractor against claims arising from bodily injury, property damage, and certain other liabilities, but it does not absolve them from their responsibility to adhere to legal and safety standards in their construction work.

The deductible mentioned in the insurance policy refers to the amount the contractor must pay out of pocket before the insurance coverage kicks in. In this case, with a $1,000 deductible and $2,000 in code violation costs, the contractor would be responsible for the deductible amount and may also have additional liability for ensuring that the code violations are addressed, depending on the specifics of the contract and local laws.

In real-world applications, code violations can lead to penalties and additional costs, which the contractor is fundamentally liable for, as they have the primary duty to ensure all construction meets the required legal standards and codes. This makes the contractor ultimately responsible for handling the financial repercussions of the violations, regardless of what the insurance might cover after the deductible.