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.
This comprehensive guide provides essential insurance knowledge for general contractors, including:
- Coverage by Business Size: Solo contractors to established construction businesses (10+ employees) with essential policies from general liability to umbrella coverage
- General Liability Quotes: Data from 800+ general contractor quotes with premiums typically ranging 0.94% to 5.26% of annual revenue
- Workers’ Compensation Insights: Key class codes 5606, 5645, 5403 with rates typically ranging from $2 to $17+ per $100 of payroll
- Additional Coverage Options: Commercial auto, inland marine, builder’s risk, umbrella policies, subcontractor insurance requirements, and contract/license bond requirements
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.
- Services Offered: Diverse construction capabilities create unique risks that uniquely influence premiums. Evaluate all services to understand related expenses.
General Contractor Liability Insurance Quotes Study
Our comprehensive analysis of over 800 general liability insurance quotes for general contracting businesses 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
Ready to see if you’re overpaying for contractor insurance? ContractorNerd’s quote platform instantly reveals whether you’re getting competitive rates on your coverage. No required commitments, no aggressive sales tactics, no forced phone conversations. Just receive straightforward, competitive quotes from insurers who specialize in general contracting businesses, giving you the power to make informed coverage choices.
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.
Join thousands of general contractors who’ve discovered smarter insurance shopping. Get your tailored quotes in minutes.