As a general contractor, you face risks on the job every day.
Unpredictable events such as an accident at your construction site or a workplace injury can derail your project or — even worse — put you out of business.
That’s why general contractor insurance can be so important.
If you’re wondering how to get general contractor insurance for your business, we’re here to help.
We’ll walk you through the requirements, costs, and some helpful tips for buying general contractor insurance.
General contractor insurance requirements will vary, depending on the type of work you do, if you have employees, and if you need to be licensed. Your business is unique, so your contractor insurance should be tailored to cover your specific business needs.
Because there isn't a one-size-fits-all solution, you will want to understand the basics of general contractor insurance requirements.
You may need to get general contractor insurance if you live in a state that requires it, if you have employees, or if you work on certain projects.
Customers may not work with you if you're not licensed and insured, so getting coverage could also be a smart move if you want to grow your business.
You may think of yourself as a handyman, but an insurance provider may view you as a general contractor. The more accurate you are about your business, the better off you’ll be when it comes to getting the appropriate coverage for your needs.
Here’s the difference:
A general contractor hires multiple subcontractors to complete a project. If a general contractor wins a bid to build a house, they will likely hire roofers, electricians, plumbers, painters, and other tradespeople to complete the job.
A handyman works on their own. They take on projects alone and don’t hire subcontractors. A handyman is often a jack-of-all-trades who can do a bit of everything from painting and plastering to light electrical work.
Before an insurance company insures your business, they will want to determine if you hire subcontractors or if you operate as a handyman. You may not need comprehensive general contractor insurance if you're a handyman. Handyman insurance may be enough to serve your needs.
General contractor insurance is a bundle of policies that could protect you from the most significant risks in your industry, including property damage, bodily injury, and lawsuits.
So what does general contractor insurance typically cover?
As a general contractor, you’re always at risk for on-site accidents. For example, a client could trip over your tools and get hurt. As a business owner, you could be held liable for those injuries.
A general liability insurance policy can help cover the costs of:
If you’re a general contractor with employees, you may be legally required to have workers compensation insurance. A workers comp policy will help protect you and your business if an employee gets hurt, injured, or sick while working on the job.
Workers comp can cover:
Let’s say that you’re renovating a client’s house and you accidentally damage their dining room table. Your general liability insurance can help cover the cost of repairing or replacing the furniture and potentially any legal costs if your client sues you.
A general liability insurance policy will typically cover damage to third-party property only, so you’ll need a business personal property policy to protect your own property and equipment. This may include furniture, fixtures, and inventory that you own, use, or rent inside your workspace.
A business personal property policy can cover financial claims involving:
Additionally, inland marine insurance can protect the tools and equipment you use while you’re on the job. If your tools and equipment get damaged or stolen on the job, you may not have to pay out-of-pocket to repair or replace your property.
An inland marine insurance policy can protect your business financially from:
Even the most buttoned-up business can make an honest mistake. That’s where professional liability insurance comes in. If you inadvertently cause an error on a blueprint or fail to deliver a service as promised, you could be sued by your client.
A professional liability policy may cover any damages and legal costs that you might be ordered to pay due to negligence.
Professional liability insurance typically covers:
Now that you know more about the different types of policies, you’re probably wondering, “How much is general contractor insurance?”
The price of your policy is usually determined by a number of factors including:
Want to have a better idea of how much general contractor insurance will cost? Just answer some questions about your business, and we’ll get you a customized quote in under 10 minutes.
We work with leading national insurers, so we can shop for coverages and premiums to fit your budget.
Think about the industry-specific risks associated with your general contractor business, so you’ll be prepared for the coverage you’ll need.
Be prepared with details about your business, including the location and size of your contracting business, number of employees, payroll, revenue, and information about any previous claims.
At Simply Business, we work with insurers to provide general contractor insurance policies tailored to your specific risks. You can get business insurance quotes online in a matter of minutes.
Once you choose a policy, make sure you know how to make payments and file claims if necessary.
Let potential clients know once you’re an insured contractor with general contractor insurance. Be sure to obtain a certificate of insurance as proof of coverage.
Now that you know the best tips for buying general contractor insurance, it’s time to take action and consider whether this insurance is right for you. At Simply Business, we take the time to understand your business so you get the tailored coverage you might need to be fully protected.
I've always loved to write and have been lucky enough to make a career out of it. After many years in the corporate advertising world, I'm now a freelance writer—running my own show and contributing to Simply Business. Fun fact: I have three desks in my house, but I still do my best thinking walking in the woods.
Susan writes on a number of topics such as workplace safety, customer sales, and workers' compensation insurance.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.