General liability insurance for contractors provides financial protection against claims of bodily injury, property damage, or advertising injury caused by business operations. If a third party, such as a client or visitor, is injured or experiences property damage on a job site, the policy covers medical costs, legal fees, and settlements. Contractors often require this insurance to meet client or licensing requirements. By covering unforeseen liabilities, this policy ensures the business can continue operations without facing crippling financial losses from lawsuits or claims.