General contracting can sometimes be dangerous, since you’re providing the bulk of the service for construction projects. A bag of cement could land on your foot, you could fall off a roof while shingling or simply pull your back while lifting something, despite your best efforts to stay safe.
Then there are the outside risks of litigation: someone could start a lawsuit if they feel the work you did was substandard. That’s why it makes sense to find insurance for general contractors. Below we’ll cover everything you need to know about general contractor insurance and recommend the 7 best general contractor insurance companies for your consideration.
- The 7 Best General Contractor Insurance Companies
- What is General Contractor Insurance?
- How Much Does General Contractor Insurance Cost?
- Getting Quotes Through an Online Commercial Insurance Broker
The 7 Best General Contractors Insurance Companies
Below we’ve listed 7 of the top places to begin looking for general contractor insurance:
- CoverWallet: Best for Comparing Quotes of Leading Companies
- Progressive: Best discount if you combine both general liability and commercial auto policies with the same carrier
- Next Insurance: General and professional liability combined options
- Hiscox: Works with a wide variety of specialized contractor types
- The Hartford: Extremely comprehensive business owners policy
- Simply Business: Best for finding the cheapest coverage from reputable carriers
- InsurePro: Best for short-term coverage
CoverWallet: Best for Comparing Quotes of Leading Companies
General contractor insurance can be quite complicated. Different general contractors might need different types of business insurance. Working with a good and knowledgeable broker specializing in business insurance for general contractor can be a good option. We recommend CoverWallet who is one of the leading national online commercial insurance broker. We selected a general liability plan for a general contractor with $800,000 in annual revenue. They had to call their agents to discus our options. The agent is very knowledgeable and thorough. He explained to us in details the types of business insurance we must have and the ones that we might want to consider to protect our business. After 20 minutes on the phone with the agent, he was able to provide us with 3 quotes from Hiscox, Liberty Mutual, and Nationwide.
Progressive: Best for combining general liability and commercial auto coverage from the same carrier
Progressive provides commercial insurance coverage including several options that are ideal for general contractors, like commercial auto, general liability, and workers’ compensation.
Progressive is the industry leader for commercial auto insurance. As a contractor, you will need to have commercial auto or commercial truck insurance, depending on the type of vehicle you drive. And you should definitely consider getting a commercial auto or truck insurance quote from Progressive. It is easy and fast to get a quote online with Progressive.
You can also get a general liability insurance quote online with Progressive too. They also offer bundling discount if you decide to buy both general liability and commercial auto insurance policies from Progressive.
Next Insurance: Best for General and Professional Liability Combined Options
Next insurance offers two of the major types of insurance for general contracts, as mentioned above. It offers general liability and professional liability insurance. If these are the two main products you are concerned about, check out this company.
Next Insurance offers the plans across the basic, pro and pro plus tiers. The basic plan just covers general liability, the pro plan covers both general and professional liability and the pro plus plan increases the coverage limits of the general and professional liability plans. It states the premiums start at $62.50 per month.
Hiscox: Works with a wide variety of specialized contractor types
Hiscox is a major player in the small business insurance world. As such, it offers a general liability insurance plan to contractors. The company works with a wide variety of contracting professionals, from carpentry to construction to HVAC. A drawback is that the company does not have an option in their online quote process to select a general contractor. We entered interior carpentry in Wisconsin to get a quote. For a business with $80,000 in revenue, it gave us a quote of $96.90 per month.
The Hartford: Extremely comprehensive business owners policy
You can also find insurance for general contractors through The Hartford. This company offers an interesting business owners policy (BOP) that combines general liability, commercial property, and business income insurance into one plan. Many BOP plans only cover property and general liability.
From there you can find add-ons, like inland marine insurance and data breach coverage. You can also find other products, like workers’ compensation and commercial auto. The online quote process for this company links you to their partner Commercial Insurance.net.
Simply Business: Best for finding the cheapest coverage
Simply Business is a digital brokerage firm specializing in serving small businesses. What sets them apart is that they partner with several reputable carriers that have solid financial strength ratings and tend to offer low-cost coverage. That makes it easy for you to find the cheapest general liability insurance quotes with them.
After submitting your information, Simply Business will provide several quotes from partners that they work with. Many of their carrier partners may not be well-known but offer great affordable quotes that you wouldn’t be able to access otherwise.
Getting and comparing several quotes online are fast and simple. Within 10 minutes you will find the cheapest one for you.
Simply Business also has a great customer satisfaction rating on trustpilot.
InsurePro: Best for affordable short-term coverage
InsurePro specializes in finding short-term coverage for small businesses at cheap rates. If you don’t need the traditional long-term annual coverage, you may be able to save a lot of money with short-term coverage from InsurePro.
Pros:
- Offers short-term and seasonal coverage. You can get coverage for a few days or a project
- One form generates three or more quotes
Cons:
- Doesn’t offer all coverage types in all areas
- Must file claims through the insurance company (you can’t file a claim through InsurePro
- Who is a General Contractor?
- How are General Contractors Different from Independent Contractors?
- What Business Insurance Does a General Contractor Need?
- What are the Standard Requirements of General Contractor Insurance?
- General Liability Insurance for General Contractors
- How Much Does General Contractor Insurance Cost?
- How to Get Cheap General Contractor Insurance Quotes?
- What are the General Contractor Insurance Requirements in Texas?
- What are the General Contractor Insurance Requirements in California?
- What are the General Contractor Insurance Requirements in Florida?
- What are the General Contractor Insurance Requirements in Colorado?
Who is a General Contractor?
General contractors are like the general managers of a restaurant. They oversee the entire project, keep things on schedule, and also hire any contractors necessary to provide specialized services, such as carpentry. Depending on the size of the company, you may see the general contractor pitching in and working alongside their contractors throughout the day.
General contracting companies can work on:
- Renovations
- Home Restorations
- Home Remodels
- Commercial Renovations
- Construction Sites
How are General Contractors Different from Independent Contractors?
A general contractor usually hires independent contractors or keeps contractors on-staff to work on more complex projects, like constructing a building. The general contractor has the ability to work on multiple areas at once or else schedule the work so there aren’t any delays.
Independent contractors are usually sole proprietors who work on jobs for general contractors or who work on smaller jobs, such as building a deck. Sometimes, independent contractors work with other contractors, but as partners who split the pay from a project.
>>MORE: The 9 Best Independent Contractor Insurance Companies for 2021
What Business Insurance Does a General Contractor Need?
On the whole, general contractor insurance simply refers to the types of small business insurance that a general contractor may want to carry. The products available for general contractors can vary from insurer to insurer. For instance, digital insurance company Next Insurance offers both professional liability and general liability to general contractors.
General liability insurance can often cover bodily injury, property damage and libel, slander and defamation, as is the case with the Next Insurance product. It’s commonly known as “slip and fall insurance” because it’s the type of general insurance that covers in the case of the most common damages and accidents.
Professional liability insurance, often called errors and omissions insurance, covers you in case someone claims damages from what they feel to be a mistake or act of negligence on your part. For instance, if a contractor built a home and the foundation had problems, a homeowner could sue for damages related to a poorly built house.
Workers’ compensation coverage is also required by most states for general contractors with employees. This insurance helps cover the costs of missed pay, medical bills, and even death benefits for workers who are injured on the job. Coverage requirements vary a lot from one state to another.
Commercial auto insurance is usually required at the state level for general contractors with company owned vehicles. The coverage types are similar to traditional auto insurace, such as:
- Liability Only
- Comprehensive Coverage
However, the coverage limits are much higher to provide for the costs of replacing a specialized truck or vehicle and sometimes, the equipment inside.
Quote comparison powerhouse Insureon lists a wider selection of products available to general contractors. Some of the other products you might find under the header of insurance for general contractors includes:
- Contractor’s tools and equipment insurance: Can cover you if your equipment becomes lost, damaged or stolen.
- Builder’s risk insurance: If a structure sustains damages while still under construction, like during a fire, theft or high winds, this product can offer coverage.
Since so much can go wrong while building, remodeling or installing, general contractors have a fair share of insurance types to choose from.
What are the Standard Requirements of General Contractor Insurance?
Usually, general contractor insurance requirements vary by state or by the requirements of the your clients and customers. Real estate investment groups that own large properties may ask a general contractor to carry several million dollars or more in general liability insurance.
However, most medium-sized general contracting projects are adequately covered by general liability coverage of $1 million per occurrence. If needed, companies can purchase umbrella coverage of between $1 to $5 million for big construction projects.
Other standard insurance coverage limits that are usually expected for general contractors include:
- Leased Equipment Coverage: $50,000
- Workers’ Comp: $1,000,000
- Commercial Truck Insurance: $500,000 – $1,000,000
General Liability Insurance for General Contractors
General liability insurance is often the core component of a general contractor’s insurance policy because it provides protection from most common issues. Afterall, construction sites are dangerous places where contractors work on damaged buildings or incomplete properties. If someone were to wander onto the site they could fall or be hit by some equipment leaving the contractor potentially responsible for the medical costs.
This type of insurance also protects against damage done to the property as a result of your equipment or operations. Even doing something as simple as driving a digger over aresidential driveway could crack the pavement. If this happens, general liability can cover the costs of repairing the driveway for the homeowner.
Since, general liability covers daily operations, it also covers accidents, damage, and injuries caused by the general contractor’s employees. However, independent contractors will need to carry their own general liability insurance to cover their actions.
In addition, there are a few caveats of having general liability insurance:
- It doesn’t cover injuries to your staff or employees; only non-employee injuries are covered.
- General liability insurance doesn’t cover malicious acts or intentional acts of damage.
- Most insurance companies place a cap of $1,000,000 per occurrence on general liability insurance.
How Much Does General Contractor Insurance Cost?
The cost can vary based on a number of factors, like the risk level of what you work on, the limits you choose or how large your business is. However, to get an idea of what you might expect to pay, Insureon offers some averages for the major types of insurance for general contractors:
- General liability insurance: About $90 per month / $1,090 per year
- Workers’ compensation insurance: About $265 per month / $3,175 per year
- Commercial auto: About $165 per month / $1,990 per year
- Contractor’s tools and equipment insurance: About $15 per month / $170 per year
- Professional liability insurance: Under $45 per month / $520 per year
Of course, the only way to know for sure is to shop around and get several quotes.
How to Get Cheap General Contractor Insurance Quotes?
Comparing insurance quotes from multiple sources is the best way to find the cheapest general contractor’s insurance. Some sites offer instant online quotes, like Hiscox and Next Insurance. Others may have to contact you by phone or email. If you choose an insurance broker like CoverWallet, you can also compare multiple insurance quotes at once.
Other ways to get cheap general contractors’ insurance quotes?
- Bundle your general contractors insurance with other policies.
- Maintain a secure worksite and institute theft prevention measures.
- Create a safety program with regularly updated procedures.
- Use newer, well-maintained equipment.
- Consider increasing your deductible.
What are the General Contractor Insurance Requirements in Texas?
The Lone Star State is an outlier in that certain kinds of commercial insurance are not required, including general liability insurance and workers’ compensation. The only time workers’ comp is required for general contractors is if they work on a project for a public employer. However, it’s recommended that you get these kinds of insurance for protection from potential lawsuits. If you are interested in paying for workers’ compensation coverage know that the base costs range between $2.82 and $9.45 per $100 of payroll. Here are the best general contractor insurance companies in Texas for your consideration.
What are the General Contractor Insurance Requirements in California?
General liability insurance also isn’t required in California, but is recommended because they don’t place a cap on lawsuits. General contractors with employees are required to carry workers’ compensation in the amounts of:
- $100,000 per occurrence
- $100,000 per employee
- $500,000 for the policy limit
In California, the base cost for workers’ compensation ranged between $3.30 and $10.39 per $100 of payroll in 2020.
Learn more at the best general contractor insurance in California
What are the General Contractor Insurance Requirements in Florida?
If you are a general contractor you’ll be required to carry both general liability and workers’ compensation insurance. In Florida, general contractors must carry workers’ compensation for all of their employees. If a general contractor hires a subcontractor for a job, the general contractor is also required to check that the subcontractor carries appropriate workers’ compensation for employees.
The minimum limits for workers’ compensation in Florida are:
- $100,000 per occurrence
- $500,000 aggregate
- $100,000 per disease
In 2020, the average rates for workers’ compensation in Florida were $15.15 per $100 of payroll for those in carpentry and the general building industries.
The minimum limits for general liability insurance for general contractors is:
- $300,000 for bodily injury
- $50,000 for property damage
Learn more at the best general contractor insurance companies in Florida.
What are the General Contractor Insurance Requirements in Colorado?
In the state of Colorado, general contractors with employees are required to carry workers’ compensation. The rates for workers’ comp in the home remodeling industry range between $6.79 to $14.94 per $100 in payroll.
Colorado is unique in that it doesn’t require general liability insurance at the state level, but other contractors may be required to be covered. For instance, plumbers and electricians must get licensed at the state level and need insurance coverage to get their licenses.
Also, several municipalities require general contractors to be licensed at the local level. This is important because these municipalities also require general contractors to have general liability insurance for their license. For instance, Pikes Peak Regional Building Department asks general contractors with a Class A license to carry $500,000 in combined single limit liability insurance.
Each community will have different requirements. Be sure to inquire with your local city or county before providing general contracting services.
Final Thoughts
- General contractor insurance in an umbrella term that covers the common types of insurance general contractors carry. These include general liability, professional liability, workers’ compensation, commercial auto, builder’s risk and contractor’s tools and equipment insurance.
- Costs of insurance for general contractors fluctuates between which types of insurance you choose to carry.
- You can find a wide variety of small business insurers who offers products for general contractors. However, getting a quote through comparison sites may lead you to a phone number.
- Different states have different requirements for general contractors, from licensing to insurance coverage.
