General Contractor Insurance
General contractor insurance protects your business from job-site risks like injuries, property damage, and theft. It includes essential coverages such as general liability, workers’ compensation, and tools protection. Insurance costs vary based on your services and team size, but getting covered is quick and easy with online quotes.
Choose the right coverage from trusted insurance providers.
Why do general contractors need insurance?
Running a small business as a contractor comes with its challenges, and one of the biggest concerns is the risks associated with the construction site. Accidents can happen at any time, turning what seems like a normal day into a disaster.
Having the right business insurance in place is essential because it helps cover the expenses related to unexpected situations such as worksite injuries or even stolen equipment.
Whether it’s an accident or a tool that’s gone missing, these issues can affect the flow of your business. As contractors, you face such risks every day, and without proper insurance, the financial burden could be overwhelming.
What types of insurance do general contractors need?
As a general contractor, it’s essential to have the right insurance policies in place to protect your business from common risks. Here are the key types of commercial insurance you’ll need:
Business owner’s policy
This policy conveniently bundles commercial property and general liability insurance into one cost-effective plan for dealers. A BOP is ideal for securing auto shop insurance and shielding businesses from financial losses.
Under this plan
Customer injuries
Damaged customer vehicles
Damaged business property
Commercial auto insurance
A policy designed for dealers and repair shops helps pay for property damage and medical bills after an accident. It is required in many states for businesses that own cars.
Under this plan
Car accident repair costs
Vandalism and theft
Weather damage
General liability insurance
This policy covers basic liabilities for auto service businesses, protecting against dealer risks like customer injury at a repair shop. To maximize savings, businesses can bundle it with property insurance or a business owner’s policy for broader coverage.
Under this plan
Customer injuries at a repair shop
Accidental vehicle damage
Slander and advertising injuries
Workers’ compensation insurance
Workers’ comp is required for auto shops in almost every state to cover employee injuries and related costs. It protects both employees and sole proprietors by handling work injury costs that health insurance might deny.
Under this plan
Employee medical expenses
Partial wage reimbursement
Lawsuits
Tools and Equipment Protection Plan
Contractor’s tools and equipment insurance helps protect your construction gear no matter where you go. This policy keeps your tools and equipment safe while you’re moving them (in transit) or using them at a jobsite. To qualify, your items usually need to be valued under $10,000.
Under this plan
Equipment less than five years old
Mobile equipment
Small toolsa
Professional Liability Protection Plan
Professional liability insurance for contractors, also known as errors and omissions insurance, protects against financial losses when a construction mistake or oversight causes a lawsuit. This policy is key for handling claims related to your work and promises made to clients.
Under this plan
Accusations of negligence
Failure to complete construction
Failure to use promised materials
How much is general contractor insurance?
The cost of general contractor insurance can vary widely depending on several factors. A general contractor working alone will generally pay less compared to a small construction company. Insurance providers take the following factors into account when calculating premiums:
1. General Contracting Services Offered
The type of services you offer, such as residential or commercial work, will impact the cost. Commercial projects tend to have higher risks and therefore higher premiums.
2. Business Property and Equipment
The value of your business property and equipment also plays a role in determining insurance costs. The more expensive or specialized your equipment, the higher your insurance may be.
3. Business Income and Size
The size and income of your business influence the overall insurance costs. Larger companies with higher revenue typically pay more due to the increased risk.
4. Types of Insurance Purchased
The specific types of insurance you opt for, such as builder’s risk insurance or pollution liability insurance, can also affect the cost. Specialized policies may raise the premium.
5. Policy Limits, Deductibles, and Claims History
Higher policy limits, lower deductibles, and a claims history with more claims can all increase your insurance costs. A clean claims history can help reduce premiums.
6. Number of Employees
The more employees you have, the higher your workers’ compensation premiums are likely to be, as more employees mean higher risk exposure.
How do I get a general contractor's insurance?
Getting a general contractor’s insurance is simple, especially when you have your business details ready. Here’s how you can secure insurance coverage and surety bonds:
1. Complete a Free Online Application
Start by filling out a free online application. This will ask for basic business information, such as revenue and the number of employees.
2. Compare Insurance Quotes and Choose Policies
Once your application is submitted, you can compare insurance quotes from different providers. This helps you find the best coverage for your general contracting business.
3. Pay for Your Policy and Download a Certificate
After choosing the best policy, simply pay for your insurance and download your certificate of insurance. This process is straightforward and quick.
Eagle Nation’s licensed insurance agents work with top-rated U.S. insurers to find the most affordable coverage tailored to your needs, whether you’re working independently or have a team of employees.
Two ways to start your coverage
Quotes online
Talk to an agent
Verified business insurance reviews
Hear from customers like you who purchased small business insurance.
Common questions about general contractor insurance
Whether or not you need a license, permit, or bond for your contracting business depends on your location. Here are some key points to consider:
- California requires contractors to obtain a general contractor license from the state licensing board if the job cost exceeds $1,000 or if the project requires permits or employees.
- New York mandates a license only for home improvement businesses operating in specific cities.
- Texas does not require a license at the state level for general contractors, but some local city and county governments may have their own requirements.
- Even if your state does not require a general contractor license, it’s important to check county and city jurisdictions as professional licensing could be necessary.
For smaller home improvement projects, a general contracting license might not be required, but this depends on the type of work and the size of the project.
The main distinction between a general contractor and a subcontractor lies in their roles on a project. Contractors work directly with clients on a project, while subcontractors assist contractors in completing specific tasks. Because of these roles, both have different sets of liabilities that impact the insurance policies they require.
General contractors should consider several types of coverage, especially when they hire subcontractors:
- General liability insurance may be required by clients before they sign a work agreement. Subcontractors can either get their own policy or request to be listed as an additional insured on the contractor's policy.
- Workers' compensation insurance may be mandatory for both general contractors and subcontractors, depending on the state law and whether the business is licensed.
Surety bonds are typically purchased by general contractors to meet contract or license requirements, and subcontractor work is often covered under the general contractor’s surety bond.
Besides the aforementioned policies, general contractors should consider additional coverage:
- Commercial property insurance protects the building and its contents like tools, furnishings, and computers from risks like fire, storms, or burglaries.
- Business personal property (BPP) coverage can be added to general liability insurance to protect business property at a designated location, even if you don’t have a physical building.
- Inland marine insurance covers construction tools and equipment in transit, at a job site, or stored off-site. This includes tools valued under $10,000 or materials being installed during a project.
- Commercial umbrella insurance increases the coverage for general liability, commercial auto, or employer's liability insurance once policy limits are reached.
General contractors and construction businesses can save money on insurance by comparing quotes from different providers. Here are a few tips to reduce your costs:
- Bundle policies: A business owner's policy (BOP) combines liability insurance with property insurance for savings.
- Customize your policy: Opt for lower limits, a higher deductible, or exclusions to lower your premium.
- Focus on workplace safety: A safer work environment leads to fewer accidents, resulting in fewer claims and lower insurance costs.
Top construction contractors we insure
Don't see your profession? Don't worry.
We insure most businesses.
"Great experience! Got general liability, tools, and workers' comp coverage all in one place. Easy process and fast certificate delivery."