West Virginia Contractors License Practice Exam

Which of the following is a common exclusion in contractor liability insurance?

1. Natural disasters

2. Intentional acts

3. Property damage

4. Employee injuries

The correct answer is: Intentional acts

A crucial aspect of contractor liability insurance is understanding what is typically covered and what is excluded. One common exclusion in contractor liability insurance is intentional acts. This exclusion is based on the principle that insurance is designed to provide protection against unforeseen events and accidents, rather than intentional wrongdoing. When a contractor engages in intentional acts that lead to damage or liability, these actions are generally outside the scope of what insurance is meant to cover. Insurers do not want to provide coverage for claims that arise from actions that are deliberate or willful in nature, as these can be seen as a moral hazard that encourages reckless behavior. By excluding intentional acts, insurance policies encourage contractors to operate in a responsible manner, knowing that any purposeful negligence or misconduct will not be protected by their insurance. In contrast, natural disasters, property damage resulting from accidents, and employee injuries can often be covered under different types of insurance policies or endorsements, though they may have their own limitations and conditions. Understanding these distinctions helps contractors make informed decisions about their coverage needs and the associated risks.