Does general liability ever cover a failed test?

Only if the failure causes bodily injury or physical damage to property other than your own work. A system that simply does not meet specification is not property damage.

Are liquidated damages insurable?

Generally not under property or general liability policies. Some professional liability policies respond to the underlying professional error, but usually not to a contractually agreed sum as such.

Contractor professional liabilityBuilder’s risk

Who pays when a commissioning test fails and nothing is physically damaged?

By the Rayon research desk · Last reviewed October 6, 2026

Only contractor professional liability. Builder’s risk and general liability both need physical loss or damage before they respond, and builder’s risk excludes liquidated damages even when a covered event caused the delay. A design or commissioning error that leaves a hall short of specification is a pure financial loss.

Which policy looks at what?

Policy	Needs physical damage?	Responds to a failed test with no damage?
Builder’s risk	Yes	No. It also excludes liquidated damages
General liability (CG 00 01)	Yes: bodily injury or property damage	No
Contractor professional liability	No	Possibly, if the failure comes from a professional service such as design or commissioning advice

What counts as delegated design?

If your scope has you size, select or engineer part of the system (a cooling loop, a controls sequence, a busway layout) rather than only install to someone else’s drawings, you have taken on design. The AGC’s 2026 paper on data-center construction gives the example of a subcontractor with delegated design who miscalculates heat load: the loss is economic, and only professional liability addresses it.

Why are data-center jobs different?

Data-center contracts carry performance requirements on power, cooling and humidity, with liquidated damages when a hall is handed over late or short of specification. Those damages can be large relative to a subcontract’s value, and no property policy pays them.

What should I check?

Whether your scope of work includes any design, engineering, sizing or commissioning advice.
Whether you carry contractor professional liability at all, and whether it excludes faulty workmanship or means and methods so broadly that little is left.
The liquidated-damages and consequential-damages clauses in the subcontract, and whether your liability is capped.
Whether the generative AI exclusion appears on any of your policies, since commissioning documents are often AI-assisted.

Sources

General information, not legal advice or an interpretation of your policy. Policy forms and endorsements control. Form numbers are © Insurance Services Office, Inc. and are cited for reference.