There are a lot of moving parts in construction. General contractors are responsible for organizing and supervising over all of the subcontractors, scheduling inspections, and interacting with the clients. With so many moving parts, the risk of an accident is high, so it is best to be protected.
Coverwallet began its journey in New York City in 2015 operating under the
Aon Insurance banner. At Coverwallet, you can access everything you need to
keep your company well-protected at an unbeatable price.
With a 100-year history of insuring businesses, Hiscox is well-known across
America and globally. With more than 500,000 small business customers,
Hiscox is fully aware and trained in the unique risks a business can face.
Thimble provides business insurance that can be tailored to your business by
the year, month, day, or even the job. At Thimble, the process to getting
the right business insurance is simple, scalable, and flexible.
General contractor insurance is a way to protect your company financially from events that could put you out of business. From a client walking onto the job site after hours and injuring themselves to an inspector falling off a ladder, general contractor insurance covers general contractors from claims made against them.
Who needs general contractor insurance?
If your business specializes in coordinating and executing construction or remodeling of home or commercial projects, general contractor insurance is a must have to protect the business and its assets from financial obligations stemming from claims made against the company. Without it, you will be paying out of pocket for the injured party’s medical expenses and/or property damage as a result of the incident.
What insurance do general contractor businesses need?
Since construction is so complex with so many moving parts, it is imperative that general contractors have a wide net of coverage so that they are able to mitigate their risk. Some of the more common types of insurances that general contractors use are: general liability insurance, commercial auto insurance, workers’ compensation insurance, commercial property insurance, tools and equipment insurance, inland marine insurance, and more.
Common types of general contractor insurance
General liability insurance
When accidents happen in the workplace to a third party, whether during or outside of work hours and they result in bodily injury or property damage, you may be held liable. A good general liability insurance policy will protect your business from claims and ensure that you will not be paying for these claims and all costs associated with litigation out of pocket.
Commercial auto insurance
Generally a good insurance to have if you are using a vehicle or trailer to transport materials and tools to project sites or to carry out necessary actions for the job. This type of insurance will cover any bodily injury and property damage claims that arise from an accident involving your work vehicle.
Workers’ compensation insurance
This type of insurance protects the owners and the business from claims arising from injuries in the workplace. It also helps the injured party recover, rehabilitate, and still earn a portion of their lost wages while on medical leave. Employers’ liability insurance is used if an employee files a lawsuit blaming your business for negligence which led to an accident, employers’ liability insurance will protect your business from costs like settlements, court fees, and attorney fees. Employers’ liability insurance is usually baked into your workers’ compensation policy, but you should always review your policy to be sure.
Commercial property insurance
If you rent or own a property to conduct business, commercial property insurance covers any damage to the building, as well as any equipment and inventory that may be in it.
Tools and equipment insurance
This insurance covers tools, products, equipment, and materials when being transported or stored temporarily at a third party location such as a jobsite.
Inland marine insurance
This type of insurance protects equipment during transportation to job sites and storage areas. Since some machinery is usually large and expensive, this is a good coverage to have.
Commercial umbrella insurance
An umbrella policy can help cover financial burdens from claims that surpass the limits of your other insurance policies.
Professional liability insurance: If a project is carried out poorly and the defect causes bodily injury and/or property damage, the normal general liability policy will not cover the costs. For these occurrences you will need professional liability insurance. Also known as errors and omissions (E&O) insurance.
What are the limits of general contractor insurance?
The limits of your general contracting business should be determined by different factors. If you specialize with small home renovations, your risk of expensive property damage is lower, so a standard $1,000,000 per occurrence/$2,000,000 general liability insurance policy should be sufficient. If your company handles building apartments or more complex projects, you will most likely need higher limits to cover mistakes that could cause extensive bodily injury and/or damage to the surrounding area. Below is a basic guide with median limits for general contractors.
General liability insurance
$1,000,000 per occurrence $2,000,000 aggregate
Commercial auto insurance
$1,000,000 aggregate
Workers’ compensation insurance
$100,000 bodily injury per accident
Commercial property insurance
$1,000,000 per occurrence $2,000,000 aggregate
Tools and equipment insurance
$5,000 aggregate
Inland marine insurance
$5,000 aggregate
Commercial umbrella insurance
$1,000,000 aggregate
Professional liability insurance
$300,000 per occurrence
How much does general contractor insurance cost?
There are different factors that can affect how much general contractor insurance costs. These factors can include the types of services offered, the tools and vehicles used by the business, the area you conduct your business, and the size of your business (employee number). Grouping policies together with the same insurance provider can help save money through discounts. Below you can find the median costs for each type of insurance mentioned. Your actual premium may vary.
General liability insurance
$1,090 annually
Commercial auto insurance
$1,990 annually
Workers’ compensation insurance
$3,175 annually
Commercial property insurance
$742 annually
Tools and equipment insurance
$170 annually
Inland marine insurance
$169 annually
Commercial umbrella insurance
$750 annually
Professional liability insurance
$520 annually
How to choose the best general contractor insurance?
In order to choose the best policy for general contractor business, you should first identify where your business could be at risk and look for providers that can cover those risks. With everything going on in a busy jobsite, this is a step that you should take your time completing. Once you have identified the risks, you can shop around with different providers to see what products and deals they offer. Here are a few useful tips that can help choose the best provider for you:
Make an assessment of the risks associated with your business and choose a policy that covers them adequately.
Customization of products to fit your needs.
A provider should be able to customize their existing products to meet your needs.
Making sure the provider has an A rating with the Better Business Bureau or similar credible third party ranking platform.
The BBB rates how satisfied the public is with large companies, so this score is a good measure on how to qualify a provider.
Making sure the provider can offer a few different price points and product tiers.
The provider gives you a few different options and lets you pick what will work best with your budget and requirements, versus trying to sell you the highest priced product.
