What Does General Liability Insurance Actually Cover for Maryland Electricians?

If you're a Maryland electrician, you've probably asked yourself: What does general liability insurance actually cover? And could somebody please explain it in plain English?

In this blog, I’ll start with a real story that shows what can go wrong on a jobsite. Then we’ll walk through exactly how general liability coverage steps in, how it protects you, and where you need to pay attention to the fine print.

The Fire That Sparked the Lawsuit

Let’s set the stage.

A family business in Wisconsin came into work one morning to find their building destroyed. A fire had burned it to the ground. Damage totaled more than $700,000.

Investigators traced the cause of the fire back to the electrical work. And specifically, to an electrician who hadn’t wired the system properly.

That’s every electrician’s nightmare.

In this case, no one was hurt — but the business had major property damage, was shut down for months, and lost a ton of income. And guess who they blamed?

The electrician.

How General Liability Insurance Responds

Now, let’s break this down and walk through what general liability insurance actually does in this situation — and what it does not do.

There are four big protections inside your general liability policy:

1. Bodily Injury

2. Property Damage

3. Products & Completed Operations

4. Legal Defense (Attorney Fees)

   
   

Let’s go one-by-one.

1. Bodily Injury

This is the first and most basic coverage. If someone gets hurt as a result of your work — say a tenant gets shocked, a kid touches an exposed wire, or a fire breaks out while people are in the building — bodily injury coverage steps in.

In our story, thankfully, no one was inside the building. But if they had been? You could be looking at medical bills, burn treatment, or even death benefits — all of which your general liability policy would respond to.

2. Property Damage

This one hits home. Property damage coverage protects you if your work causes damage to someone else’s property.

That means:

• A fire like in our story

• A power surge that fries their expensive equipment

• Faulty wiring that causes a leak in the walls

In our example, the insurance policy had to respond to $700,000 in damages. That’s real money. And if the electrician didn’t have coverage? That would’ve come straight out of pocket.

3. Products & Completed Operations

This is the part of your policy that kicks in after the job is done.

Most electricians think their risk ends when the last wire is installed and the invoice is paid. But that’s not how it works in court.

If a fire breaks out three months after you finished the job, guess what? That’s still your responsibility — and products & completed operations coverage is the specific section of your general liability policy that defends you.

Without it, you’re exposed. This is why every electrician needs this coverage in place — especially if you're doing commercial or industrial work.

4. Legal Defense

This might be the most overlooked part of the entire policy — but also the most important.

Because even if you're not at fault, you’ll still need to defend yourself. That means hiring attorneys, bringing in expert witnesses, doing forensic work, and possibly sitting through months (or years) of legal back-and-forth.

Here’s what general liability insurance does: It hires the lawyer for you. It pays the lawyer for you. It negotiates the settlement for you.

You don’t even have to find the attorney. The insurance company will take over and assign one from their panel of defense counsel. These are people who handle cases like yours all day long.

That’s a big deal. Because legal defense can cost tens of thousands before a settlement is ever even reached.

But How Much Does It Pay?

This is where most electricians get caught off guard.

The amount your insurance will pay depends entirely on how much insurance you bought — and on some key details inside the fine print.

There are three things you need to pay attention to:

1. Policy Limits

Let’s go back to our fire example. The damage was $700,000.

If you had a $1 million per occurrence general liability policy, you’re probably covered. But what if the damage had been $3 million? Or what if a factory had shut down for six months because of your wiring failure?

Now you’re on the hook for:

• Property damage to the factory

• Six months of lost income

• Potential lawsuits from vendors and employees

That $1 million policy might not cut it anymore. Which is why a lot of commercial electricians purchase an umbrella policy — an extra layer of coverage that stacks on top of your general liability.

2. Defense Costs: Inside vs. Outside the Limit

Here’s where it gets technical — but stick with me.

Every general liability policy has something called a “defense cost clause.” This tells you whether the attorney fees are inside or outside your policy limit.

• If defense costs are inside the limit, your $1 million policy starts shrinking the moment you hire a lawyer.

• If they’re outside the limit, the insurer pays legal defense in addition to your $1 million coverage.

Why does that matter?

Because sometimes the attorneys cost more than the actual claim. If you're dealing with complex litigation, expert witnesses, forensic engineers — it adds up fast.

So when you’re buying a policy, don’t just look at the price. Ask your agent: “Are defense costs inside or outside the limit?” That one question could save your business.

3. Deductibles & Retentions

Some policies include deductibles or self-insured retentions (SIRs). That’s the amount you’re responsible for before the policy kicks in.

With an SIR, you might have to pay the first $10,000 of the claim — and also manage the defense until you hit that threshold.

With a deductible, you pay your share, but the insurer still takes over the defense from day one.

Know what you’re signing up for.

The Bigger Picture

Let’s zoom out.

If you’re an electrician in Maryland, general liability insurance isn’t just a line item on your budget — it’s your safety net. It protects your work, your reputation, and your ability to stay in business.

But here’s the reality: most electricians don’t really know what they’re buying.

They go with the cheapest quote, or pick whatever a buddy recommended. And then when something goes wrong — when there’s a fire, or an injury, or a lawsuit — they realize they bought the wrong thing.

A Quick Recap

General Liability Insurance for electricians covers:

• ✅ Bodily Injury to others

• ✅ Property Damage caused by your work

• ✅ Products & Completed Operations (post-job mistakes)

• ✅ Legal Defense and Attorney Fees

But the amount it pays — and how it pays — depends on:

• 💡 Your Policy Limits

• 💡 Whether Defense Costs are Inside or Outside the Limit

• 💡 Whether you have an Umbrella Policy

• 💡 Any Deductibles or Retentions in your policy

Final Thought: Don’t Wait Until It’s Too Late

Look — you don’t have to know everything about insurance. But you do need to work with someone who does.

Because when a claim hits, it’s too late to re-shop your policy. What’s on paper is what you’ve got.

If you’re a Maryland electrician and you want a second opinion on your current program — or you just want someone to explain it in plain English — reach out to me. My contact info is below. I’m happy to walk you through it.

https://www.insuranceforentrepreneurs.net/contact-8

Let’s Build Something Great

Thanks for reading. If this helped you, send it to another electrician in your network. And if you want to learn about what General Liability does NOT cover, check out the follow-up post.

Until then — be safe, keep building, and make sure your insurance is working as hard as you are.