General contractor insurance shouldn’t be as complex as coordinating multiple trades and managing project timelines. At ContractorNerd, we’ve transformed how general contractors shop for insurance through our proprietary quote platform that connects you exclusively with contractor-friendly insurers and our team of tech-enabled specialized agents.
Our contractor-specific technology generates instant online quotes tailored for your business – including limits, deductibles, and optional coverages such as subcontractor liability, builder’s risk, and project-specific policies. As trades-only specialists, we’ve streamlined what once took days into a digital process requiring just minutes.
Data drives our entire approach – empowering general contractors to make informed purchasing decisions. By analyzing more than 850 general contractor insurance quotes from contractor-friendly insurers, we deliver clarity on which coverages are truly essential for your contracting business and fair pricing expectations broken down by state and revenue size. Get your quotes today – compare options instantly and purchase coverage, all from your computer or phone.
Key Takeaways from This Guide:
- Essential Coverage by Business Size: From solo contractors needing basic general liability to established firms requiring umbrella policies, EPLI, and builder’s risk coverage
- General Liability Class Codes: Critical codes including 91340 (residential carpentry), 91342 (commercial remodeling), and 915XX series for high-subcontractor operations
- GL Quote Analysis: Data from 800+ quotes showing premiums typically range from 0.94% to 5.26% of annual revenue
- Workers’ Comp Classifications: Key codes 5606 (supervisory only), 5645 (residential construction), and 5403 (commercial construction) with rates from $2-$17+ per $100 of payroll
- Additional Coverages: Commercial auto, inland marine, bonds, and umbrella policies essential for growing contractors
Let’s get started.
Contractors Insurance – What Do You Need?
Insurance needs change as your business grows. Here’s a quick guide to essential coverage by business size:
Solo Contractors:
- Contractor Liability Insurance (General Liability)
Covers property damage and non-employee bodily injury. This is the insurance customers typically require when asking if you’re “licensed and insured.- Products & Completed Operations Insurance
Covers liabilities after project completion. Often added as an endorsement (an add-on) to your general liability policy.
- Products & Completed Operations Insurance
- Contractor’s Errors & Omissions (E&O)
Protects you from claims related to faulty workmanship or materials. Usually an inexpensive add-on to general liability. - Inland Marine (Tools & Equipment Coverage)
Covers tools and equipment against damage, theft, or loss, either as an add-on to your general liability policy or standalone policy for higher limits. - Commercial Auto Insurance
Necessary if you use vehicles exclusively for business.
Small Contractor Business (1–3 Employees):
Solo coverages, plus:
- Workers’ Compensation Insurance (required)
Provides benefits for employee injuries or illnesses related to work. - Commercial Property Insurance
Protects your workshops, offices, and storage areas. - Hired & Non-Owned Auto Coverage
Covers rented or employee-owned vehicles used for business purposes. - Leased Equipment Coverage
Protects rented equipment from damage, loss, or theft. Contractors commonly choose around $50,000 coverage. - Umbrella Insurance or Higher Liability Limits
Adds additional liability protection as your business grows (extra coverage above your standard insurance limits, useful for large claims).
Established Construction Business (10+ Employees):
All previous coverages, plus:
- Excess / Liability Umbrella ($2M–$5M+)
Extends liability limits beyond your standard policy, essential for larger projects. - Installation Floater
Protects materials and equipment while in transit or stored at worksites awaiting installation (coverage specifically for stored or transported items before they’re installed). - Employment Practices Liability Insurance (EPLI)
Protects against employee lawsuits involving discrimination, harassment, wrongful termination, and hiring practices. - Pollution Insurance
Covers contamination-related incidents during operations or waste transport. Can be standalone or sometimes added to your general liability policy. - Builder’s Risk (Course of Construction)
Covers structures under construction against fire, theft, vandalism, and natural disasters.
Contractor Liability Insurance – aka General Liability Insurance for Contractors
This is one of the most crucial insurance policies for contractors, because it covers the liability risks while actively working on jobsites. Types of claims commonly faced include:
- Property Damage: Accidental damage to a client’s building, floors, walls, etc.
- Bodily Injury: A client, visitor or bystander getting hurt due to your work activities.
- Defective Products: Lawsuits over an installed product that turns out defective.(Add-On)
- Completed Work: Lawsuits over issues from past completed jobs. (Add-On)
Contractor Liability Limits: Most contractors start with $1 million per occurrence/$2 million aggregate (maximum total amount the policy will pay in a policy period, no matter how many claims). Experts recommend at least $1 million in liability coverage. As your business continues to grow, it is worth exploring higher limits or an umbrella policy to offer additional liability protection.
Contractor Liability Premiums: Premiums will typically fall between 1-3% of annual revenue. Our summarized quote data below shows how this average premiums from leading carriers changes by State. These average premiums are specific to contractors.
Key Factors Impacting Contractor Liability Premium:
- Revenue: Higher revenues mean expanded operations and greater claim exposure. This prompts higher premiums.
- Limits: Higher limits means more risk and higher premiums.
- Claims History: Frequent past claims drive premiums up. A clean record keeps GL affordable.
- Location: State regulations and cost of claims impacts premiums.
- Class Codes: Diverse construction capabilities create unique risks that uniquely influence premiums. Evaluate all services to understand related expenses.
General Liability Class Codes for General Contractors
Understanding GL class codes is crucial for accurate pricing and proper coverage. Insurance carriers use these codes to assess risk and calculate premiums based on your specific operations. Below we cover the common GL class codes for general contractors performing residential and commercial new builds and remodeling work:
91340 – Carpentry – Construction of Residential Property Not Exceeding Three Stories in Height
- Applies to rough carpentry work performed by contractors engaged in construction and/or repair of residential dwellings three stories or less
- Includes all carpentry work at a particular job or location including garages and decks constructed in connection with the residential dwelling
- Covers framing, building decks, studding of exterior walls, and general rough carpentry
- Applicable to both new construction and renovation projects on residential properties
- Note: Typically has restrictions on subcontracted work percentage
91342 – Carpentry – NOC
- Applies when carpentry operations performed are not described specifically by another construction classification
- Commonly used by commercial contractors performing commercial remodeling, tenant improvements, and repairs
- Broader classification for mixed carpentry operations
- Note: Typically has restrictions on subcontracted work percentage
91583 – Contractors – Subcontracted Work – In Connection With Building Construction, Reconstruction, Repair or Erection – One or Two Family Dwellings
- Applies to that portion of operations performed by adequately insured subcontractors
- Specific to one or two family dwelling projects
- Operations performed by subcontractors without adequate insurance shall be classified under the specific classification for each operation
- Lower risk profile since work is performed by insured subcontractors
91585 – Contractors – Subcontracted Work – In Connection With Construction, Reconstruction, Repair or Erection of Buildings – NOC
- For subcontracted work on buildings not otherwise classified
- Applies to commercial and larger residential projects beyond one or two family dwellings
- Requires verification of adequate subcontractor insurance
91581 – Contractors – Subcontracted Work – In Connection With Construction, Reconstruction, Erection or Repair – Not Buildings – NOC
- For subcontracted work on non-building structures
- Includes infrastructure, site work, and other construction not involving buildings
- Lower rates due to subcontracted exposure
98993 – Construction or Project Management
- For contractors providing oversight and management without direct construction
- Lowest risk classification for general contractors
- Requires minimal to no hands-on work by employees
- Operations limited to construction or project management services
Important Note on Subcontractor Percentages: The 91340 and 91342 class codes generally have restrictions on the percentage of work that can be performed by subcontractors. Contractors who subcontract a higher percentage of their work should use the 915XX series codes (91581, 91583, 91585) which are specifically designed for operations with significant subcontracted work.
Simplifying Class Code Selection with ContractorNerd: the ContractorNerd platform helps simplify class code selection through an intelligent combination of:
- Guided class code selection based on your specific operations
- Analysis of your revenue and subcontractor usage patterns
- Integration with publicly available data about your business
- Automatic matching to the most appropriate classification
This data-driven approach ensures you’re properly classified from the start, avoiding costly audit surprises and ensuring you get the most competitive rates for your actual operations.
General Contractor Liability Insurance Quotes Study
Our comprehensive analysis of over 800 general liability insurance quotes for general contracting businesses doing residential remodeling reveals significant pricing variations across carriers and business profiles. This data represents quotes from major insurance providers for general contractors operating across various states and project types. The following breakdown reflects typical general liability premiums based on these key business characteristics:
- $500K Revenue: Small contracting firm with owner plus 3-5 employees, minimal subcontracting (under 10%), established for 3+ years with clean claims history
- $1M Revenue: Mid-size contractor with 8-12 employees, approximately 20-25% subcontracted work, established business with 5+ years experience and documented safety programs
- $2.5M Revenue: Established contracting company with 15-20 employees, roughly 30% subcontracted work, proven track record with comprehensive safety protocols and project management systems
The cost of general contractor liability insurance typically ranges from 0.94% to 5.26% of annual gross revenue, reflecting the diverse risk exposures inherent in construction and contracting work. Our research indicates that general contractors who actively compare quotes can reduce their premiums by 33% to 37% below market averages, translating to substantial annual savings.
Small contracting operations earning $500,000 annually face average premiums of $7,550, though competitive shopping can reduce this to $4,780—a significant 36.69% reduction. As contracting businesses expand their project scope and revenue, insurance costs rise proportionally, with mid-tier operations at $1 million revenue averaging $13,000 in annual premiums. Established general contractors generating $2.5 million in revenue typically pay around $35,580 for general liability coverage, though favorable rates can lower this to $23,020.
| Revenue Level | National Average | Favorable Rate | Potential Savings | Low % of Revenue | High % of Revenue |
| $500,000 | $7,550 | $4,780 | 36.69% | 0.94% | 2.19% |
| $1,000,000 | $13,000 | $8,670 | 33.31% | 0.89% | 1.81% |
| $2,500,000 | $35,580 | $23,020 | 35.30% | 2.23% | 5.26% |
State-by-State Quotes
Insurance premiums for general contracting businesses vary dramatically from state to state, influenced by local building codes, construction claim frequencies, and market competition. We’ve compiled detailed contractor insurance cost data for all 50 states to help you benchmark your current rates and discover potential savings opportunities specific to your location.
State location can impact your premiums by 200% or more, making geographic cost awareness crucial for competitive bidding. Access our complete contractors insurance cost database to see exactly where your state ranks and why.
Workers’ Compensation Insurance for Contractors
Workers’ compensation insurance is a crucial policy for contractors. It provides coverage for your employees if they get hurt or sick because of their job. This insurance helps pay for medical care, lost wages, and other benefits for injured workers.
For contractors, premiums typically range from $2 to $17+ per $100 of payroll, depending on the specific class code and other factors.
Contractor Workers’ Comp Limits: State-dependent. Each state sets its own requirements for coverage limits.
Contractor Workers’ Comp Premiums: $2 to $17+ per $100 of payroll annually
Key Factors Impacting Contractor Workers’ Comp Premium:
- Class Codes: Employees are categorized based on job type and risk level. Higher-risk roles lead to higher premiums; these NCCI Work Comp class codes are the most frequently used; slight variations in these codes for Non-NCCI states.
- Code 5606 (lowest rate): For project oversight with no direct on-site work [not eligible if doing hands-on work]
- Code 5645 (medium rate): For small residential buildings up to three stories
- Code 5403 (highest rate): For complex projects over three stories or commercial buildings
- Payroll Size: Larger payrolls generally result in higher premiums, as the formula is typically (Payroll / $100) * Rate * Experience Modifier.
- Experience Modifier: This factor reflects your claims history (a rating based on your past claims; lower numbers mean fewer claims and lower premiums), starting at 1.0. A lower modifier can decrease premiums, while a higher one increases them.
- State Regulations: Each state has its own workers’ compensation laws, affecting benefits, claims processes, and baseline rates.
- Safety Programs: Implementing and documenting robust safety initiatives can potentially lower your premiums.
- Claims History: A history of frequent or severe claims can significantly increase your premiums.
Remember, while workers’ compensation can seem expensive, it protects both you and your employees. It’s not just a legal requirement in most states—it’s a crucial part of running a responsible and sustainable contracting business.
If you’d like to learn more and give our workers comp calculator a spin, please see our in-depth guide on Workers Compensation Insurance for Contractors.
Additional Insurance Contractors Should Consider
Here’s a concise version of all sections:
Inland Marine Insurance
Covers tools and equipment onsite and in transit. For $15k-$50k coverage, expect $1,500-$5,000+ annually. Rates depend on equipment value, use, and storage location.
Commercial Auto Insurance
Covers business vehicles. Annual premiums: $1,000-$4,000 per vehicle, with $500k-$1M limits. Rates vary based on fleet size, vehicle types, and driver records.
Contract and License Bonds
Guarantees contract fulfillment. Limits vary by location and project ($10,000-$500,000+). Premium: 1-3% of bond amount. Higher rates apply for low credit scores. California requires contractors to carry a $25,000 contractor bond to operate independently. Verify your compliance with all local and project mandates.
Commercial Property Insurance
Protects buildings and offices against damage, theft, and disasters. Annual premiums: $2,000-$20,000+, based on property value, location, and construction type.
Umbrella Liability Insurance
Provides extra liability coverage. $1M limits costs $1,000-$2,000+ annually, Larger construction companies can explore $3M+ limits. Rates vary with company size, services, and claims history.
Employment Practices Liability Insurance (EPLI)
Protects against employee lawsuits. $500k-$1M coverage costs $2,500-$7,500+ annually. Rates based on employee count, revenue, and claims history.
Builder’s Risk Insurance
Protects ongoing construction projects. Premium: 0.15-0.75%+ of project value. Costs vary with project value, duration, and complexity.
Get Instant General Contractor Insurance Quotes with ContractorNerd
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Why general contractors choose ContractorNerd:
✓ Complete Insurance Solutions in One Place – General liability, workers’ comp, commercial auto, builder’s risk, umbrella policies, and subcontractor coverage requirements – handle it all through one streamlined platform. Eliminate juggling multiple agents and carriers.
✓ On-Demand Digital Certificates – Win bids instantly with immediate digital COI delivery. When project owners or developers request proof of insurance, send it directly from your phone. No delays, no chasing your agent, no lost projects.
✓ Grow Faster, Win More Contracts – While competitors wait for insurance paperwork, you’re already submitting certificates and breaking ground. Our data shows general contractors can save 33-37% on premiums—put those savings back into growing your business.
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