Home Improvement Contractor Insurance Cost & Coverage Guide

Q: If a plumbing subcontractor I hire causes a major leak, is my general liability policy responsible for the water damage?

It depends on your policy and contract, but often, yes. As the primary contractor, your general liability policy may be expected to cover the initial damage caused by a subcontractor. You would then typically seek reimbursement from your subcontractor's insurance. This is why it's crucial to ensure any subs you hire carry their own insurance.

Q: Are my tools and a client's building materials covered if they are stolen from the job site overnight?

Your tools would be covered under your Tools & Equipment (Inland Marine) policy. However, building materials owned by the client are generally not covered by your policy. The client's homeowner's insurance or a builder's risk policy would typically cover stolen materials.

Q: If one of my employees drops a heavy tool and damages a client's brand new hardwood floor, does my insurance cover the repair?

Yes, this is a classic example of what general liability insurance is for. Your policy would cover the cost to repair or replace the damaged section of the hardwood floor, up to your policy limits.

Q: Am I required by my state to have workers' compensation insurance if I only have one employee?

In most states, yes. The requirement to carry workers' compensation insurance usually begins the moment you hire your first employee, whether they are full-time or part-time. Failing to do so can result in significant fines.

Q: Does my general liability policy cover the cost to redo my own work if a client claims it was done improperly?

No, general liability insurance does not cover faulty workmanship—that is, the cost to fix your own mistakes. That type of risk is typically covered by Professional Liability (Errors & Omissions) insurance.

Try our insurance calculator

Get a quick estimate in just 3 steps. No obligation. No email required.

Insuring 1 million small businesses worldwide.

This block is configured using JavaScript. A preview is not available in the editor.

Home Improvement Contractor Insurance Cost

Home improvement projects are full of moving parts. From custom cabinetry to complex plumbing, your work transforms a client’s space, but it also comes with risks. A dropped tool, an employee injury, or a client slip-and-fall can happen in an instant, leading to thousands of dollars in out-of-pocket costs. That’s where home improvement contractor insurance comes in—it’s your financial safety net, so one mishap doesn’t derail your business.

Let’s break down what home improvement business insurance costs, what affects the price, and how Simply Business makes getting coverage easier and more affordable.

How Much Does Home Improvement Contractor Insurance Cost?

Depending on your coverages, home improvement contractors pay a median price of $92 per month, or $1,104 per year.

What you pay depends on a few key things, including: the type of work you do, the size of your crew, and the type of coverage or policy you choose. Here’s a look at the median costs¹ for the most common policies home improvement contractors purchase.

Insurance Policy	Median Monthly Cost	Median Annual Cost
General Liability	$89	$1,068
Workers’ Compensation	$233	$2,796
Tools & Equipment	$27	$324

¹Data from Simply Business customers specializing as a “home improvement contractor/remodeler” who purchased at least one or a combination of general liability, tools and equipment, or workers’ compensation policies from July 1, 2024 to December 31, 2024. Reflected price tiers may not include purchase of all available policies under home improvement insurance.

These numbers are based on real policies purchased through our site. But getting a great premium isn’t just about the numbers — it’s about working with a partner that understands your business. And because we work with a range of trusted insurers, you’ll see coverage options to match your business, so you can choose a customized package that works for you and your budget.

What Insurance Does a Home Improvement Contractor Need?

While every business is unique, we recommend the following coverages for home improvement contractors.

General liability

A foundational coverage to help handle costs from third-party accidents, property damage, and bodily injury.

Why You Need It: A client trips over your power cord and breaks their wrist, resulting in costly medical bills and a potential lawsuit. Your general liability policy can cover their medical expenses and your legal defense costs.

Median Cost: $89/month

Contractor’s equipment and small tools

Also known as inland marine insurance, this coverage can financially protect equipment and inventory that is in transport or stored offsite.

Why You Need It: Your work van is broken into overnight, and thousands of dollars worth of power tools are stolen. Tools and equipment insurance can cover the cost to replace them, so you can get back to work quickly.

Median Cost: $27/month

Workers’ compensation insurance

Coverage to help take care of employees who get sick or injured on the job. Most states require this coverage for small businesses with full- or part-time employees. It also can benefit business owners who don’t have employees.

An employee strains their back while lifting heavy drywall and needs physical therapy. Workers’ comp can cover their medical treatments and a portion of their lost wages while they recover. Check our state-based insurance hub for your state’s specific rules.

Median Cost: $233/month

Get a quote for your home improvement contractor business today

Get a Quote

Business Insurance Made Better

A one-minute explanation

Learn how we’re making finding business insurance fast, easy, and affordable – all in just 60 seconds.

Video transcript

Hi there we’re Simply Business and small business insurance is what we do. We work
with top insurers who specialize in small business coverage. No one size fits-all solutions here. We’ve worked with thousands of business owners like you so we have a good idea of what different businesses need. We get it, you do one web search and the results can be overwhelming, and not in a good way. We can save you from that. We’re ready when you are, it takes just a few minutes online. Enter some information about your business and some pretty cool technology shops for great coverage at competitive prices in just seconds. You choose and purchase the coverage that works for you. Not to worry we’ve got licensed insurance pros to help you over the phone then we zip your certificate of insurance and other policy documents straight to your inbox. That’s how easy it is to insure your business with Simply Business.

Trusted by Over 1 Million Small Businesses Worldwide.

This block is configured using JavaScript. A preview is not available in the editor.

Frequently Asked Questions (FAQs)

If a plumbing subcontractor I hire causes a major leak, is my general liability policy responsible for the water damage?

Are my tools and a client’s building materials covered if they are stolen from the job site overnight?

If one of my employees drops a heavy tool and damages a client’s brand new hardwood floor, does my insurance cover the repair?

Am I required by my state to have workers’ compensation insurance if I only have one employee?

Does my general liability policy cover the cost to redo my own work if a client claims it was done improperly?

The Simply Business Difference

Simply Business is a digital insurance brokerage. That means we’re not tied to one insurer. Instead, we partner with a range of top-rated carriers and use smart technology to match you with policies that fit your specific business, your risks, and budget.

Maybe you’re just starting out and want solid protection without overspending. Or maybe you’re growing fast and need coverage that can grow with you. Either way, we’re here to help — with a choice of affordable policies and small business expertise to help you get the coverage you need.

Get a Quote