General Contractor Insurance Costs: GL & Workers’ Comp Benchmarking 2025

Based on analysis of over 800 general contractor insurance quotes, GL premiums typically range from 0.89% to 2.19% of annual revenue, with contractors who actively compare quotes potentially achieving savings of 33-37% below average market rates by securing favorable pricing. This translates to real dollar impact—a general contractor with $500,000 in revenue paying average GL rates of $7,550 annually could potentially reduce premiums to $4,780 through strategic shopping, saving $2,770 per year if they qualify for favorable rates.

Workers’ compensation adds another layer of cost, with dramatic variations by state and classification. For residential construction (5645), rates range from $3.51 per $100 of payroll in North Dakota to $43.42 in Georgia. Commercial construction (5403) shows similar extremes, from $2.46 per $100 in West Virginia to $18.60 in New York. For that same $500,000 contractor with $150,000 in payroll, annual WC premiums could vary from $5,265 in North Dakota to $65,130 in Georgia for residential work.

Learn about which contractors insurance policies actually matter for your business after comparing prices.

National GL Premium Benchmarks

Our comprehensive data reveals clear premium patterns across different business sizes:

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%	0.89%	2.10%

Small Contractors ($500,000 revenue): Average GL premiums of $7,550 represent 1.51% of revenue, though rates vary from 0.94% to 2.19% depending on location, claims history, and operational specifics. Favorable rates bring premiums down to $4,780, creating potential savings of 36.69% for contractors who qualify and shop effectively.

Mid-Size Contractors ($1,000,000 revenue): GL costs average $13,000 or 1.30% of revenue, with the range tightening to 0.89% to 1.81% as businesses mature and demonstrate stability. Favorable rates of $8,670 remain achievable, maintaining potential savings of 33.31% even at higher revenue levels for qualifying contractors.

Established Contractors ($2,500,000 revenue): Larger operations face average premiums of $35,580, though the percentage of revenue shows interesting dynamics—ranging from 0.89% to 2.10%. The favorable rate of $23,020 represents 35.30% potential savings, demonstrating that shopping value persists regardless of business size for those who qualify.

Six Major Cost Drivers Affecting Your Premiums

1. Class Codes shape both components differently—GL codes like 91340 (residential carpentry) versus 91585 (subcontracted commercial work) can swing rates by 200%, while WC codes 5645 (residential) versus 5403 (commercial) show over 1200% variation between states
   
2. Years of Experience primarily impacts GL rates, with contractors having 5+ years of claims-free history often qualifying for preferred pricing tiers with moderately lower rates than new businesses
   
3. Subcontractor Usage affects both coverages—GL carriers may require different class codes above 30% subcontracted work, while WC exposure changes based on whether you maintain crews or primarily supervise
   
4. Revenue vs Payroll drives different calculations—GL premiums scale with gross revenue including materials and subcontractor costs, while WC focuses solely on your direct employee payroll
   
5. Claims History impacts each coverage uniquely—a single GL claim might moderately increase rates, while WC claims affect your experience modifier, potentially doubling premiums for several years
   
6. Geographic Factors create dramatic variations—Louisiana GL rates run 2-3x higher than Virginia, while Georgia’s WC rates for residential work exceed North Dakota’s by over 12x
   

Specialization Rate Analysis – General Liability

Residential Remodeling Contractors (GL Code 91340)

Contractors focusing on residential remodeling and renovation work under three stories operate under class code 91340, which carriers view as moderate risk due to occupied home exposures and homeowner interaction frequency. This classification typically has a cap of subcontracted work (e.g. less than 30%) — exceeding this threshold triggers multi-classification or reclassification.

Based on our national data, residential specialists at $500,000 revenue typically fall near the average of $7,550 in GL premiums, with opportunities to potentially achieve the favorable rate of $4,780 through strong risk management and carrier selection. The ability to capture that 37% potential savings often depends on demonstrating systematic safety protocols and maintaining clean claims history in occupied home environments.

GL Risk Advantages:

• Lower height exposure reduces fall claims
• Residential projects typically involve smaller claim values
• Direct homeowner relationships enable better risk communication
• Shorter project durations limit exposure windows

GL Risk Challenges:

• Working in occupied homes increases property damage frequency
• Homeowner slip-and-fall exposure during projects
• Emotional attachment to homes can escalate claim disputes
• Water damage claims from plumbing or roof work

For workers’ compensation, residential remodelers typically use class code 5645 (carpentry-construction of residential buildings), with rates varying dramatically by state from $3.51 to $43.42 per $100 of payroll.

Commercial General Contractors (GL Code 91342)

Commercial project contractors operating under code 91342 face different risk profiles, with larger project scales, multiple trade coordination, and commercial property exposures. This classification covers office buildouts, retail renovations, and light commercial construction.

Commercial contractors often see premiums slightly above the national averages due to increased complexity and heights. A $1,000,000 commercial contractor might pay closer to $14,000-15,000 versus the blended average of $13,000, though the same 33% potential savings exists for those who leverage market competition. The key lies in demonstrating professional risk management and project management capabilities, including a history of successful subcontractor management.

GL Risk Advantages:

• Commercial clients often have sophisticated risk transfer mechanisms
• Contracts typically include stronger indemnification provisions
• Professional project management reduces miscommunication claims
• Scheduled work minimizes emergency repair exposures

GL Risk Challenges:

• Business interruption claims can exceed property damage values
• Multiple subcontractor coordination increases liability
• Stricter timeline penalties create completion pressure
• Public access during construction elevates third-party injury risk

Commercial contractors typically classify employees under WC code 5403 (carpentry NOC), with rates ranging from $2.46 to $18.60 per $100 of payroll depending on state.

High-Subcontractor GCs (GL Code 91585)

General contractors subcontracting over 70% of work operate under the 915XX series codes, recognizing their primarily supervisory role. While this reduces direct operational exposure, it creates complex risk transfer and additional insured obligations.

These contractors often achieve rates below our national averages due to reduced direct labor exposure. A $2,500,000 high-subcontractor GC will likely secure premiums below the favorable rate benchmark of $23,020, particularly when demonstrating robust COI management systems. 

GL Risk Advantages:

• Reduced direct labor exposure minimizes injury claims
• Professional subcontractors carry their own coverage
• Lower equipment and tools exposure
• Simplified operations reduce complexity-driven errors

GL Risk Challenges:

• Vicarious liability for subcontractor errors
• Additional insured endorsement costs
• Certificate tracking administrative burden
• Uninsured subcontractor exposure if verification fails

These contractors often use WC code 5606 (executive supervisors), with dramatically lower rates reflecting minimal physical work exposure.

Geographic Cost Variations

50-State Interactive Heat Maps – General Liability & Workers Comp Analysis

The four heat maps above provide instant visual insight into insurance costs across all 50 states:

1. GL Premium Ranges - Visualize how general liability costs as a percentage of revenue vary nationwide, from as low as 0.3% in Georgia to over 3.6% in Louisiana. Darker shades indicate higher premium ranges, helping you benchmark your current costs against regional averages. States like Virginia (0.4%-0.7%) and Nebraska (0.4%-0.8%) show the lightest shading, while Louisiana (2.1%-3.6%) and South Carolina (1.1%-3.1%) display the darkest.
   
2. GL Savings Opportunities - Discover potential premium reductions available through strategic shopping, ranging from 13.9% in Ohio to over 60% in South Carolina and Tennessee. This map reveals where shopping efforts yield the greatest returns, with Texas (45.3%), Mississippi (51.8%), and Vermont (51.6%) offering exceptional opportunities for contractors who qualify for favorable rates.
   
3. WC Rates - Residential (Code 5645) - Compare workers' compensation costs for residential construction across all states, from North Dakota's nation-leading $3.51 to Georgia's staggering $43.42 per $100 payroll. This dramatic 12x variation significantly impacts total labor costs and competitive positioning, with the Southeast showing particularly dark shading due to high rates.
   
4. WC Rates - Commercial (Code 5403) - Examine commercial construction WC rates ranging from West Virginia's $2.46 to New York's $18.60 per $100 payroll. Notice how the pattern differs from residential—Georgia drops to $6.21 while New York rises to the top, demonstrating how classification choices dramatically impact costs in different states.
   

Workers' Compensation Rate Analysis by Classification

Workers' compensation rates create the most dramatic geographic variations in contractor insurance costs. General contractors face two primary classifications with vastly different state-by-state pricing.

Lowest WC States - Residential Construction (Code 5645):

1. North Dakota - $3.51 per $100 payroll
2. Wyoming - $4.31 per $100 payroll
3. Texas - $4.39 per $100 payroll
4. Ohio - $4.59 per $100 payroll
5. Indiana - $5.56 per $100 payroll

Highest WC States - Residential Construction (Code 5645):

1. Georgia - $43.42 per $100 payroll
2. South Carolina - $21.48 per $100 payroll
3. Illinois - $19.23 per $100 payroll
4. Louisiana - $17.76 per $100 payroll
5. Connecticut - $17.17 per $100 payroll

Lowest WC States - Commercial Construction (Code 5403):

1. West Virginia - $2.46 per $100 payroll
2. Ohio - $2.68 per $100 payroll
3. North Dakota - $2.69 per $100 payroll
4. Indiana - $2.78 per $100 payroll
5. Oregon - $3.14 per $100 payroll

Highest WC States - Commercial Construction (Code 5403):

1. New York - $18.60 per $100 payroll
2. New Jersey - $17.09 per $100 payroll
3. Connecticut - $10.09 per $100 payroll
4. Washington - $9.32 per $100 payroll
5. Iowa - $9.12 per $100 payroll

The variation between residential and commercial codes within the same state can be striking—Georgia charges $43.42 for residential but only $6.21 for commercial work, while New York reverses this pattern with $11.47 for residential versus $18.60 for commercial.

Top 5 Most Affordable Combined Insurance States

1. North Dakota North Dakota offers exceptional WC rates for both residential ($3.51) and commercial ($2.69) construction—among the nation's lowest. GL rates span 0.7% to 1.1% of revenue with 22.9% potential savings from average to favorable pricing. A $500,000 contractor with $150,000 payroll doing residential work pays just $5,265 in WC annually, compared to $65,130 in Georgia.

2. Ohio Ohio delivers remarkably low WC rates—$4.59 for residential and $2.68 for commercial construction. Combined with GL rates from 0.5% to 0.8% of revenue and 13.9% potential savings, the state-run monopolistic fund creates predictable, affordable coverage. A commercial contractor with $200,000 payroll saves over $30,000 annually compared to New York.

3. Indiana Indiana balances affordable WC rates ($5.56 residential, $2.78 commercial) with competitive GL markets. The state's business-friendly environment and limited litigation create stable pricing. A mixed residential/commercial contractor benefits from consistently low rates across both classifications.

4. Texas Texas combines low WC rates ($4.39 for both residential and commercial under state classifications) with optional participation, rewarding safety-conscious contractors. GL rates range from 0.7% to 1.5% of revenue with outstanding 45.3% potential savings for those who qualify for favorable pricing.

5. Wyoming Wyoming offers the second-lowest residential WC rate nationally at $4.31 and commercial at $3.48. Combined with GL rates from 0.6% to 1.0% of revenue, the state's low population density and limited litigation create favorable conditions for contractors.

Top 5 Most Expensive Combined Insurance States

1. Georgia (Residential Focus) Georgia's astronomical residential WC rate of $43.42 per $100 payroll devastates contractor margins, though commercial rates remain moderate at $6.21. GL rates from 0.3% to 1.0% of revenue actually fall below national averages, but WC costs overshadow any GL advantages. A $150,000 payroll residential contractor pays $65,130 in WC alone.

2. New York (Commercial Focus) New York's commercial WC rate leads the nation at $18.60 per $100, while residential sits at $11.47. Combined with GL premiums of 1.7% to 3.0% of revenue, commercial contractors face severe cost pressure. A $200,000 commercial payroll generates $37,200 in WC premiums versus $5,360 in Ohio.

3. New Jersey New Jersey's commercial WC rate of $17.09 ranks second nationally, with residential matching at $17.09. GL rates from 1.5% to 2.7% of revenue compound the burden. The state's litigation-friendly environment and dense urban construction create challenging conditions.

4. South Carolina South Carolina's residential WC rate of $21.48 combines with the nation's widest GL range (1.1% to 3.1% of revenue) to create substantial costs. However, the exceptional 60.1% GL potential savings rewards aggressive shopping. Commercial rates remain more reasonable at $6.08.

5. Illinois Illinois charges $19.23 for residential and $7.85 for commercial WC, while GL rates span 1.2% to 2.1% of revenue. Chicago's influence drives both components higher, with limited potential savings of 34.7% in GL indicating less carrier competition.

Coverage Components - General Liability

Liability Limit Strategies

General contractors must balance adequate protection against premium costs when selecting liability limits. While $1M/$2M (per occurrence/aggregate) remains the industry standard reflected in our national benchmarks, project requirements and asset protection needs often demand adjustments.

$500K/$1M limits typically create moderate premium reductions below our quoted averages, potentially bringing a $7,550 premium down to $6,000, but may disqualify you from commercial projects and larger residential developments.

$1M/$2M limits represent our benchmark coverage, satisfying most residential and light commercial requirements while keeping premiums at the levels shown in our national data.

$2M/$4M limits add substantial premium increases over base rates, potentially pushing a $13,000 average to $18,000+ for million-dollar contractors, but become necessary for larger commercial projects and institutional clients.

Deductible Optimization

Our national averages assume a $1,000 deductible as the industry standard. Strategic adjustments can meaningfully impact your premiums:

$0 deductible creates modest premium increases above our benchmarks—appropriate for new contractors or those with limited cash reserves

$2,000 deductible provides minor to modest premium reductions from quoted averages, potentially saving $600-900 annually for $500,000 contractors

$5,000 deductible can generate moderate premium savings, bringing favorable rates even lower but requiring sufficient reserves for claims

Specialized Endorsements for General Contractors

Additional Insured Endorsements (CG 20 10 & CG 20 33) represent the most common contractual requirement in construction. When you work as a subcontractor, property owners and general contractors require listing on your GL policy to ensure coverage if they're sued for your work. The standard Additional Insured (CG 20 10) adds specific parties per project, while the Blanket Additional Insured (CG 20 33) automatically includes any party required by written contract—essential for contractors juggling multiple projects. Blanket coverage typically adds minor premium increases but saves administrative costs and prevents coverage gaps from missed additions.

Primary/Non-Contributory Coverage (CG 20 01) ensures your policy responds first to claims, without requiring the additional insured's insurance to contribute. This endorsement typically accompanies additional insured requirements, though its application remains controversial due to ambiguity around "primary" and "non-contributory" terms. Despite industry debate, most commercial contracts now require this coverage. Creates minor to modest premium increases but often non-negotiable for commercial work.

Waiver of Subrogation (CG 24 04) prevents your insurance company from seeking recovery against parties you've agreed to hold harmless. For example, if your employee is injured due to another contractor's negligence, this waiver stops your insurer from pursuing that contractor for reimbursement. Critical for maintaining project relationships and often contractually required. Typically adds minor premium increases.

Completed Operations for Additional Insureds (CG 20 37) extends additional insured status beyond project completion. Standard additional insured endorsements only cover ongoing operations, creating dangerous gaps when defects emerge months or years later. This endorsement ensures upstream contractors remain protected after project completion—particularly crucial for work with long-tail exposure like roofing or foundations. Carefully underwritten and adds modest to moderate premium increases.

Per-Project Aggregate Limits (CG 25 03) establishes separate aggregate limits for each designated project, preventing one project's claims from exhausting coverage for others. Without this endorsement, a single $2M claim could consume your entire aggregate, leaving other projects exposed. For a contractor with standard $1M/$2M limits working three projects simultaneously, this endorsement effectively provides $6M in total aggregate coverage. Essential for contractors managing multiple large projects. Adds moderate premium increases but multiplies available coverage.

Faulty Workmanship (E&O) coverage addresses construction defects and design errors, typically creating moderate premium increases to base GL rates. Critical for contractors providing design-build services.

Prior Work Coverage (Prior Work Buyback) removes the standard exclusion for work completed before your current policy's effective date, protecting you from claims arising from past projects. This endorsement proves critical when switching carriers or starting a new policy after a lapse. However, qualification requires your previous carrier to be solvent and in good standing—if your prior insurer has failed or lost their license, this coverage becomes unavailable. Typically adds modest to moderate premium increases but provides essential continuity protection.

Action Over Coverage (Employee Injury Liability Buyback) closes a critical gap between GL and WC coverage. This endorsement protects you when an injured employee collects workers' compensation, then sues a third party who subsequently passes liability back to you through contractual indemnification. Without this coverage, you face uncovered exposure despite having both GL and WC policies. Particularly crucial for contractors working under broad indemnification agreements. Adds modest premium increases.

Tools & Equipment Coverage protects owned and rented equipment, adding $500-1,500 annually depending on values—not reflected in our base GL premium data.

Professional Liability Integration combines E&O with GL for contractors offering construction management, potentially creating moderate to substantial premium increases for comprehensive protection.

Five Critical GL Coverage Priorities for General Contractors

1. Adequate Completed Operations coverage matching your longest warranty period—included in all our benchmark quotes but sometimes excluded in cheaper alternatives
   
2. Contractual Liability broad form endorsement ensuring your indemnification agreements are insurable—standard in quality policies at our quoted rates
   
3. Independent Contractors coverage confirming subcontracted work is covered—critical given 15% subcontractor assumption in our data
   
4. Property Damage expansion including XCU coverage for excavation work—may add modest premium increases for applicable contractors
   
5. Defense Cost coverage outside limits—standard in most policies at our benchmark rates, preserving your liability limits for settlements
   

Cost-Saving Strategies

Strategic Shopping Timeline

Both GL and WC policies renew annually, but optimal shopping windows differ. Start GL shopping 60 days before renewal to potentially achieve the favorable rates shown in our data—$4,780 versus $7,550 for $500,000 contractors who qualify. WC requires only 30-day lead time due to standardized rating, though classification reviews benefit from longer planning horizons.

Subcontractor Certificate Management—Your Hidden Premium Driver

How you manage subcontractor certificates of insurance (COIs) directly impacts your ability to potentially achieve the favorable rates in our benchmarks. The difference between average and favorable rates—representing potential savings of 33-37%—frequently hinges on demonstrating superior COI management to underwriters.

Risk Transfer Impact on Premiums When subcontractors carry verified coverage with appropriate limits, their insurance absorbs claims rather than passing them to your policies. Without proper COI verification, you become the de facto insurer for every uninsured sub on your projects. This exposure alone can push you from favorable rates toward the high end of our ranges—the difference between paying 0.94% versus 2.19% of revenue.

Critical COI Components That Protect Your Rates Ensure every subcontractor COI includes additional insured status naming you specifically, waiver of subrogation preventing their carriers from seeking recovery after claims, and coverage limits matching your contractual obligations. Missing any of these elements means claims flow directly to your policies, potentially preventing you from qualifying for the 33% potential savings available to contractors with strong risk management.

Audit Consequences and Reclassification During policy audits, carriers scrutinize subcontractor documentation. Missing or inadequate COIs trigger reclassification of subcontractor costs as direct payroll for WC purposes. For our benchmark $500,000 contractor with 15% subcontracted work ($75,000), reclassification in Georgia (at $43.42 per $100) would generate an additional $32,565 audit premium—quadrupling expected WC costs.

Implementation Best Practices Establish trade-specific insurance requirements recognizing different risk profiles. Pre-qualify subcontractors before mobilization, tracking expiration dates to prevent coverage lapses. Verify carrier ratings (minimum A- VII from A.M. Best) ensuring coverage will respond. Document everything meticulously—organized records demonstrating continuous coverage support potentially achieving the favorable rates shown in our data.

Bottom Line COI Impact Contractors with robust COI management may qualify for the favorable rates in our benchmarks—potentially achieving $4,780 versus $7,550 at $500,000 revenue. Poor COI management not only prevents these potential savings but can push premiums above average through surcharges, audit penalties, and restricted carrier access.

Workers' Compensation Optimization Tactics

Classification Refinement can dramatically reduce premiums through proper employee categorization. A general contractor with $200,000 payroll split between field and office work could save substantial amounts by properly segregating clerical payroll. In Georgia, properly classifying $50,000 as clerical (8810) versus residential construction (5645) saves $21,525 annually—the difference between $185 and $21,710 in premiums.

Strategic State Selection for multi-state contractors can generate massive savings. A commercial contractor with $300,000 payroll would pay $55,800 in New York (at $18.60 per $100) versus $8,040 in Ohio (at $2.68 per $100)—a $47,760 annual difference for identical work.

Residential vs Commercial Classification optimization matters enormously in certain states. In Georgia, the same $150,000 payroll costs $65,130 for residential work but only $9,315 for commercial—a $55,815 difference. Understanding and properly documenting your actual operations can prevent devastating misclassification.

Experience Modifier Management affects premiums for 3-4 years following claims. A 1.20 modifier would increase a $10,000 base WC premium to $12,000, while achieving 0.80 through safety excellence reduces it to $8,000—a $4,000 swing that compounds with business growth.

Premium Audit Preparation prevents costly surprises and identifies savings opportunities. Organize payroll records by classification, document subcontractor certificates, and maintain detailed overtime records (only straight time counts toward WC). Contractors often overpay by misclassifying employees or including excluded remuneration.

General Liability Optimization

The path from average to potentially favorable rates—with possible savings of 33-37% as shown in our data—requires systematic optimization. Consider higher GL deductibles if you have strong cash reserves, potentially stacking savings on top of favorable rates. Bundle GL with commercial auto and property coverage for multi-policy discounts not reflected in our standalone GL data. Document safety programs comprehensively, as carriers increasingly offer credits that can push you below even our favorable rate benchmarks. Evaluate project-specific coverage for unusual contracts rather than permanently increasing limits and premiums. Most importantly, leverage the dramatic variations between carriers—our data shows consistent 30%+ potential savings across all revenue levels for contractors who systematically compare options and qualify for favorable pricing.

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Methodology Note

This analysis draws from ContractorNerd's proprietary database of over 800 general contractor insurance quotes collected from major carriers between 2023-2025. Benchmarking assumes standard coverage parameters: $1M/$2M GL limits, $1,000 deductible, 3+ years in business, and clean 3-year claims history. Revenue-based GL premiums reflect mixed residential/commercial operations with approximately 15% subcontracted work. Workers' compensation rates represent current base rates for class codes 5645 (Carpentry-Dwellings Low) and 5403 (Carpentry NOC) before experience modifications or schedule credits. State-specific variations account for regulatory requirements, legal environments, and market competition levels. Potential savings calculations represent the difference between average market rates and favorable rates available to qualifying contractors.