General Contractor Insurance: What It Covers and Who Needs It

Most general contractors need insurance, even where the law doesn't name every policy. Many states require proof of general liability insurance to get or renew a contractor's license. Nearly every state requires workers' compensation once you have employees. Project owners, lenders and general contractors above you will usually ask for a certificate of insurance before you start work. Tivly can match you with a partner from our network of 450+ insurance partners who works with contractors.

Do General Contractors Need Insurance?

In most cases, yes. The requirement usually comes from one of four places:

1. Your state license. Many states and cities require general liability, and sometimes a license bond, before they issue or renew a contractor's license.
2. Your employees. Nearly every state requires workers' compensation insurance once you have employees. The employee count that triggers it varies by state.
3. Your vehicles. Trucks and vans used for the business generally need commercial auto insurance.
4. Your contracts. Clients often set minimum limits and ask to be named as an additional insured. Public projects often require a construction bond.

What Is General Liability Insurance for Contractors?

General liability insurance is the policy most contractors buy first. It can cover claims from people outside your business, such as clients, neighbors or passersby:

1. Bodily injury. A visitor trips over materials on your job site.
2. Property damage. Your crew damages a client's flooring or a neighbor's fence.
3. Completed operations. A claim comes in after the job is finished, tied to work you did.
4. Personal and advertising injury. Claims of libel, slander or copyright infringement in your marketing.

General liability doesn't cover injuries to your own employees, damage to your own tools, or the cost of redoing faulty work.

What Does General Contractor Insurance Cover?

"General contractor insurance" usually means a set of policies, not one. Here are the ones general contractors commonly carry:

1. General liability: can cover third-party injuries and property damage.
2. Workers' compensation: can cover employee medical bills and lost wages from work injuries.
3. Commercial auto: can cover accidents in business vehicles.
4. Builder's risk: can cover a building under construction and the materials on site.
5. Inland marine (tools and equipment): can cover tools and equipment on the job site or in transit.
6. Professional liability: can cover claims that design, estimating or project management errors caused a financial loss.
7. Commercial umbrella: adds extra limits above your general liability and auto policies.

Do General Contractors Need to Cover Their Subcontractors?

Usually not on your own policy, but you are responsible for checking their coverage. Most general contractors:

1. Collect a current certificate of insurance from every sub before work starts
2. Ask to be named as an additional insured on each sub's general liability policy
3. Check that subs with employees carry workers' comp

If a sub has no coverage, an insurer may count that sub's payroll on your workers' comp audit. That can raise your premium.

What Insurance Do Clients Ask For Before a Job?

Most commercial clients and many homeowners ask for the following before work begins:

1. A certificate of insurance showing your general liability, auto and workers' comp
2. Minimum limits, often written into the contract
3. Additional insured status for the owner or the GC above you
4. Sometimes a waiver of subrogation or a performance bond

How Much Does General Liability Insurance Cost for Contractors?

Cost depends on the type of work you do, your payroll and revenue, your claims history, your location and the limits you choose. See our construction contractor general liability pricing, based on Tivly policy data.

Is Insurance Different for Specialty Contractors?

The policies are similar, but the risks and pricing differ by trade. See contractor insurance for an overview, or go straight to roofing, electrical, plumbing, HVAC or handyman insurance.

How Do I Get General Contractor Insurance With Tivly?

1. Fill out the form above or call 877-907-5267.
2. Tell us about your work, your payroll, your vehicles and any limits your contracts require.
3. Our team matches you with a partner from our network of 450+ insurance partners, who can quote your business directly.