A general contractor carries the risk of the whole job, not just their own work. If a sub causes damage or a worker without insurance gets hurt, the claim can land on you. That is why GCs pay more for liability than most trades and why owners often ask for higher limits.
Most GCs build a stack: general liability, workers comp, commercial auto, and an umbrella for extra limits. Bigger jobs add builder's risk for the structure under construction and surety bonds to bid and perform.
What insurance do general contractors need?
Here is how each type of general contractor insurance fits a typical general contractor business, from what clients and states usually require to what depends on how you work.
General liability
Usually requiredOwners and lenders require it, often with higher limits. Pays for injuries and property damage you cause to other people.
About $162 a month for general contractorsWorkers comp
Usually requiredRequired for your crew, and you may answer for uninsured subs. Pays medical bills and lost wages when an employee gets hurt on the job.
About $196 a month for general contractorsLicense & surety bonds
Usually requiredLicense, bid, and performance bonds. A guarantee to your customer or the state that you will follow the rules and finish the work.
Commercial auto
Most carry itTrucks, trailers, and crew transport. Covers trucks and vans you use for work, and the damage they cause.
About $287 a month for general contractorsTools & equipment
Most carry itOwned and rented equipment. Replaces tools and gear that get stolen, lost, or damaged.
Business owners policy
Depends on your setupFor smaller GCs with an office or yard. General liability and business property bundled together, usually for less.
About $125 a month for general contractorsHow much does general contractor insurance cost?
The typical general contractor business pays about $162 a month, or $1,950 a year, for general liability, based on published customer data. Your price moves with your services, revenue, crew size, claims history, state, and the limits you choose.
| Policy | Typical monthly | Typical yearly |
|---|---|---|
| General liability | $162 | $1,950 |
| Business owners policy | $125 | $1,500 |
| Workers compensation | $196 | $2,352 |
| Commercial auto | $287 | $3,444 |
Source: Insureon cost data for this trade. Yearly figures without a published annual number are the monthly figure times twelve. These are typical figures, not quotes.
Want a number for your setup? Try the contractor insurance cost calculator, or see ways to get cheap contractor insurance.
Common general contractor insurance claims
- Subcontractor claimsIf a sub without insurance causes damage or gets hurt, the claim can come back to you. Collect certificates from every sub.
- Damage to work in progressFire, theft, and vandalism on a structure under construction call for builder's risk cover.
- Delay and budget disputesOwners may sue over delays or overruns. Contract terms and the right bonds matter as much as insurance here.
- Mixed trade riskRunning electrical, roofing, or steel work under your company raises your rate, so describe the work you self-perform.
General contractor license and bond requirements
Licensing for general contractors varies widely. Some states license GCs at the state level, often above a job value, while others leave it to cities and counties. Many public and commercial jobs require bid and performance bonds no matter where you work.
Confirm before you rely on this. Licensing and insurance rules change, and cities can add their own. Check with your state licensing board and a licensed agent before you bid.