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General Contractor Insurance
General contractor insurance protects your business from financial losses when accidents happen on the job site. Whether you manage residential builds or commercial construction projects, the right coverage keeps your contracting business protected from third party claims, bodily injury lawsuits, and property damage expenses.
At FarmerBrown.com, we help contractors across all 50 states get affordable general liability insurance, workers compensation, commercial auto insurance, and more. Our team understands the unique risks construction businesses face every day.
What is General Contractor Insurance?
General contractor insurance is a combination of policies designed to protect contractors from the financial impact of accidents, injuries, and mistakes that occur during construction activities. Your contractor’s business faces daily exposure to lawsuits from injured workers, damaged property, and dissatisfied clients.
A comprehensive insurance policy provides coverage for medical expenses, legal fees, repair costs, and other related expenses that could otherwise devastate a small business. Without proper liability coverage, a single incident at your job site could result in financial losses large enough to shut down your operation.
The construction industry consistently ranks among the most dangerous sectors for workplace injuries. That means insurance for contractors is not optional. It is essential financial protection that every general contractor needs to stay in business.
General Contractor Liability Insurance Coverage
General liability insurance is the foundation of any contractor insurance package. This policy protects contractors when their work causes bodily injury to third parties or property damage to someone else’s property. Contractors liability insurance protects your business from claims that could otherwise drain your bank account.
What Does General Liability Insurance Cover?
A general liability insurance policy provides coverage for several types of claims that construction businesses commonly face:
Bodily Injury to Third Parties
If a visitor, client, or passerby gets hurt at your job site, general liability coverage pays for their medical costs, medical bills, and any lost wages they claim.
Property Damage
When your work damages a client’s property or someone else’s property nearby, your insurance company covers repair costs and replacement expenses.
Personal and Advertising Injury
Claims involving advertising injury, copyright infringement, defamation, or invasion of privacy fall under this coverage.
Medical Payments
This coverage pays medical expenses for minor injuries without requiring a lawsuit, typically up to $5,000.
Products and Completed Operations
If your finished work causes bodily injury or property damage after the project is complete, this coverage protects you from general liability claims.
Legal Defense Costs
Your general liability policy pays legal fees to defend your business against covered claims, even if the lawsuit has no merit.
What General Liability Insurance Does Not Cover
Understanding what your general liability coverage excludes helps you identify gaps in your insurance coverage. A standard general liability policy does not provide coverage for:
Employee injuries (requires workers compensation insurance)
Vehicle accidents (requires commercial auto insurance)
Theft of tools and equipment (requires inland marine coverage)
Professional mistakes or design errors (requires professional liability insurance)
Faulty workmanship that does not cause bodily injury or property damage
Employee theft from clients (requires an employee dishonesty bond)
Business Insurance Every General Contractor Needs
While general liability insurance forms the core of your protection, most construction businesses need additional coverage to address their specific business needs. Here are the essential policies that offer coverage for the unique risks contractors face:
Workers Compensation Insurance
Workers compensation insurance is required by law in almost every state if you have employees. This policy covers medical bills, lost wages, and rehabilitation costs when your employees suffer workplace injuries during construction activities.
Workers comp also provides financial protection against lawsuits from injured employees. Without this coverage, you face significant legal fees, medical expenses, and potential fines for violating state law.
Commercial Auto Insurance for Construction Businesses
Your personal auto insurance will not cover vehicles used for business purposes. If your contracting business uses trucks, vans, or other vehicles to transport workers and materials, you need a commercial auto policy.
Commercial auto insurance covers bodily injury and property damage caused by accidents involving your business vehicles. It also protects your vehicles from theft, vandalism, and collision damage.
Professional Liability Insurance
Professional liability coverage, also called errors and omissions insurance, protects contractors who provide professional services like design work, project management, or consulting. This policy covers claims arising from mistakes, negligence, or failure to meet contractual obligations.
If a client sues because your professional advice caused them financial losses, professional liability insurance pays for your legal defense and any settlements.
Inland Marine Insurance (Tools and Equipment Coverage)
Construction businesses invest heavily in tools and equipment. Inland marine insurance protects your gear wherever it goes, whether stored at your shop, in transit, or at the job site.
This coverage pays repair costs or replacement value when your equipment is stolen, damaged, or destroyed. Since contractors work at multiple locations, this protection is essential for safeguarding your investment.
Commercial Property Insurance
If your contractor’s business operates from a physical location like an office or warehouse, commercial property insurance protects that building and everything inside it. This coverage pays for damage from fire, storms, theft, and other covered events.
Contractor Insurance and Bodily Injury Protection
Construction sites present constant risks for bodily injury. Heavy equipment, power tools, scaffolding, and hazardous materials create dangerous conditions that can injure workers and bystanders alike.
When someone gets hurt because of your construction activities, the financial consequences can be severe. Medical costs for serious injuries easily reach tens of thousands of dollars. Add legal fees and potential settlements, and a single accident could bankrupt an uninsured contractor.
Your general liability coverage steps in to cover medical costs and legal fees when third parties suffer bodily injury at your job site. Workers compensation handles workplace injuries to your employees. Together, these policies provide comprehensive financial protection against injury claims.
Construction Insurance for Advertising Injury Claims
Personal and advertising injury coverage protects your business from non-physical harm claims. While less common than property damage or bodily injury claims, advertising injury lawsuits can still create significant financial losses for contractors.
Your general liability policy covers advertising injury claims including copyright infringement, defamation, and invasion of privacy. For example, if you use a photo of a completed project on your website without the homeowner’s permission and they sue for privacy violation, your insurance provides coverage.
Surety Bonds for General Contractors
Many project owners and government agencies require contractors to obtain surety bonds before starting work. These bonds guarantee that you will complete the project according to your contractual obligations and pay your subcontractors and suppliers.
FarmerBrown.com handles all your bond needs quickly and efficiently. Common bond types include:
License and Permit Bonds
Required by many cities before issuing permits or contractor licenses.
Payment and Performance Bonds
Guarantee you will perform the contracted work and pay your subs. Typically cost 3% of contract price for projects under $400,000.
Bid Bonds
Guarantee you will honor your bid if awarded the contract.
How Much Does General Contractor Insurance Cost?
General contractor insurance costs vary based on several factors specific to your business. Understanding what affects your premium helps you budget appropriately and find ways to reduce costs without sacrificing the coverage you need.
Factors that determine your contractor insurance cost include:
Annual Revenue
Higher revenue means more exposure and higher premiums.
Number of Employees
More workers create more risk for your insurance company.
Claims History
Past general liability claims increase your rates. A clean record saves money.
Type of Work
Residential vs. commercial work, new construction vs. remodeling, and specialty trades all affect pricing.
Coverage Limits
More coverage costs more, but provides better protection.
Deductible Amount
Higher deductibles lower your premium but increase out-of-pocket costs when you file a claim.
Business Location
States like California and New York have higher rates than Texas or Indiana. Working in major cities like New York City can triple your premium.
Insurance Requirements for Subcontractors and Independent Contractors
If you hire subcontractors or independent contractors, managing their insurance is critical to protecting your business. Without proper documentation, their claims could affect your policy and your premiums.
Always collect certificates of insurance from every subcontractor before they start work.
Request to be named as an additional insured on their policies. This protects you if their work causes a claim.
When your insurance policy is audited, payments to uninsured subcontractors count against your revenue. This can dramatically increase your premium. Getting certificates of insurance upfront prevents this problem and ensures claims from subcontractor mistakes go against their policy, not yours.
Why Choose FarmerBrown.com for Contractor Insurance?
FarmerBrown.com has helped contractors find the right coverage for over 29 years. Our experienced team understands the unique risks your contracting business faces and can customize a policy contract to match your specific business needs.
Here is what sets us apart:
Licensed in All 50 States: We can insure your business no matter where you operate.
Same-Day Service: Get your insurance coverage and certificates when you need them.
Free Certificates of Insurance: We never charge for COIs and deliver them within an hour in most cases.
A+ Rated with the BBB: Our reputation for client trust and service speaks for itself.
A-Rated Insurance Companies: We work with financially strong carriers that pay claims quickly.
Hard-to-Place Risks: If other agencies have turned you down, we can often find coverage.
Multilingual Service: We serve clients in English, Spanish, and Chinese.
Frequently Asked Questions About General Contractor Insurance
Does my general contractor insurance policy cover subcontractors?
Some policies offer coverage for uninsured subcontractors, but this is generally not a good idea. You become responsible for any general liability claims they cause. Always require subcontractors to carry their own insurance and provide a certificate naming you as additional insured. This protects your business and keeps claims off your policy.
What does "licensed, bonded, and insured" mean?
This phrase tells potential clients that you have the proper contractor license, a surety bond, and liability insurance. It builds client trust and gives you a competitive advantage. Even if your state does not require a bond, you can purchase an employee dishonesty bond for less than $200 to legitimately use this marketing phrase.
Do I need professional liability coverage as a general contractor?
If you provide professional services like design work, consulting, or project management, professional liability insurance protects you from claims of negligence or errors. General liability insurance does not cover professional mistakes that cause financial losses to clients.
How much general liability coverage do I need?
Most contractors should carry at least $1 Million per occurrence and $2 Million aggregate limits. Avoid policies with lower limits like $300,000/$600,000. You might save $100 in premium, but in today’s lawsuit environment, it does not take much of a claim to exceed $300,000. Project owners often require $1 Million minimum coverage before allowing you on the job site.
Do you charge for certificates of insurance?
FarmerBrown.com never charges for certificates of insurance. Our dedicated team delivers your certificate in under an hour in almost all cases. Fast COI turnaround helps you start projects without delays.
What states require general liability insurance for contractors?
Requirements vary by state and locality. Even when not required by state law, most cities require proof of general liability insurance before issuing building permits. Many project owners also require contractors to show insurance coverage before starting work. Regardless of legal requirements, protecting your business from financial losses makes insurance a smart investment.
Get Your Free General Contractor Insurance Quote Today
Protect your business with the best coverage at competitive rates. Our knowledgeable agents will analyze your business needs and recommend the right insurance package. Whether you need general liability insurance, workers compensation, commercial auto, or a complete contractor insurance solution, FarmerBrown.com has you covered.
Let the FarmerBrown.com team make getting contractor insurance easy. Protect your business from the financial losses that could shut you down. Get the coverage you need at the rates you deserve.
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