General Contractor Insurance

As a general contractor, risk is nothing new to you and you know that you need general contractor insurance. You understand both the financial and physical risks present in your business. Physical risks such as someone getting hurt on a job site can lead to devastating financial losses if you don’t have insurance.

General contractor insurance is a combination of policies available to you that help you protect against the financial losses of specific risks. For example, a trip and fall claim could lead to tens of thousands of dollars in medical bills for an injured party. Without general liability insurance, you’re paying those costs on your own.

The type of insurance policies that you get will depend on how your business structure and what kinds of risks your company faces. General contractor insurance often includes general liability, workers’ compensation, and inland marine insurance.

Let’s take a closer look at some of the most common general contractor insurance policies for you to consider adding to your business protection plan.

General Contractor Insurance Policies

General Liability

Many people consider general liability the baseline insurance policy because it protects you from common and often costly risks. Often, people refer to this policy as a “slip and fall policy” because it protects you from third-party claim where someone gets hurt because of your business operations. Slip and fall accidents happen to be common, but for a general contractor, you may be more concerned with bystanders and customers moving around your tools and equipment.

As you know, even if you have safety standards in place to protect people, things can go wrong, and you are liable for injuries. For example, a child impales their foot with your nail gun, requiring immediate medical attention. You have the financial protection to pay for the child’s medical needs with general liability insurance.

Inland Marine

General contractors need tools and equipment to get the job done. For the most part, your tools and equipment travel with you from job site to job site, often using a work truck or van to transport them. An inland marine policy protects your tools and equipment while they are in transit.

For example, you stop at a coffee shop before going to your worksite, and someone steals several power tools from the back of your truck. Without inland marine insurance, you’re responsible for paying for this loss entirely out of pocket. With inland marine insurance, you pay a deductible, and the insurance pays the rest of the claim so that you can buy new tools to replace the stolen ones.

Worker's Compensation Insurance

You’ll most likely need workers’ compensation insurance if you have one or more employees. Most states have laws requiring it, so you will want to check on the requirements where you work. Even if you aren’t required to have it, you will most likely want to get it if you have any employees because contracting work has a lot of incidents where workers get hurt.

Workers’ compensation insurance pays for medical bills and lost wages of an injured worker who gets hurt on the job. For instance, if you have an apprentice who cuts himself with a power saw, he’ll likely need to go to the emergency room to get stitches. He may also miss out on work because of his injuries. Workers’ compensation insurance covers these costs.

Commercial Auto Insurance

Commercial auto insurance is a necessity for any general contractor who is using a truck or van as their primary work vehicle. While the DMV requires all vehicles to have insurance in order to have registration issued, personal auto insurance won’t cover claims for vehicles used for work purposes. This means that your work truck or van must have commercial auto insurance to protect it.

It pays for claims that happen in an at-fault accident or have a vehicle loss due to theft or vandalism. For example, if someone steals your work truck, your commercial auto insurance can pay to replace the truck, while your inland marine policy would pay to replace the stolen tools. To be fully covered by a commercial auto insurance policy, you must have comprehensive and collision coverage. These two coverages pay for losses to your vehicle for different types of claims. The collision coverage pays to repair your car after an at-fault accident, while comprehensive coverage pays to repair or replace the vehicle from theft, vandalism, or natural disasters.

Surety Bond

For general contractors, holding a surety bond is more than just meeting a licensing requirement. It's a testament to your professionalism and dedication in the industry, signaling to potential clients your credibility and trustworthiness. Lacking this bond might lead some clients to second-guess partnering with you. It's not merely a piece of paper; the surety bond is a cost-effective way to bolster your reputation and demonstrate your genuine commitment to quality work.

Excess Liability

You probably already know that an insurance policy has limits. Look at a general liability insurance policy. You will often see the limits starting at $100,000 and going up to $1 million – sometimes more. But what happens if you have a claim exceeding the general liability limits? You’re on the hook for the difference between the claim value and the maximum limits. That is unless you have excess liability insurance.

Excess liability insurance is a secondary policy that kicks in once your general liability limits have maxed out. It is an inexpensive way to increase your coverage to provide the most protection.

General Contractor Business Insurance Cost

Estimating the cost of general contractor insurance is no easy task. Costs will depend on:

  • Which policies you choose to buy 
  • How much coverage you get 
  • The industry you work in
  • The amount of revenues you generate 
  • Claims history

Most general contractors start with general liability insurance. For a small general contractor with no employees, you may expect premiums to start at $77 per month. Get a quote to receive the most accurate number – quotes are always free.

General Contractor Insurance FAQ

We’re big believers in keeping things simple, so ask us anything and we’ll answer honestly and without the jargon.

Why Do General Contractors Need Insurance?

State laws or some clients may require general contractors to have insurance. Even if they aren’t required to get insurance, they should consider the risks to their business and the possible financial devastation that claims can bring. A significant claim could be enough to bankrupt a general contractor who doesn’t have large savings and is without insurance.

What Are The Risks Facing General Contractors?

General contractors are a high-risk industry because they work with a lot of tools and equipment and may even work at raised levels while building a home. These all add risk for injuries that include severe lesions or broken bones. Even general contractors with rigid safety protocols in place are at risk for these injuries and more.

Is Insurance Required For General Contractor?

Check with your local business and licensing departments to determine if general liability insurance is a requirement for your general contracting business. The law doesn’t require insurance in all cases but risk experts highly recommend it. One area where insurance is usually required is where contractors have employees and need to get workers’ compensation insurance.

What Type Of Insurance Do General Contractors Need?

There are a variety of general contractor insurance policies available to cover specific situations.

A great first choice is general liability insurance. This is a must for any general contractor. General liability insurance will provide protection for damage and lawsuits involving property damage, bodily injury, advertising injury and much more.

But, general liability insurance doesn’t necessarily cover every possible risk you might face. When potential risks aren’t covered by your existing coverage, we call that an “insurance gap.” Common insurance gaps in general liability insurance for general contractors include damage to or caused by vehicles, pollution, and others.

Surety bonds are also very common in the construction industry. They act as a financial guarantee that bids on projects are made in good faith, that projects will be completed on time and according to applicable standards, and that subcontractors are paid as agreed.

How Much Is General Contractor’s Insurance?

There are several factors to determine the cost for each insurance.

General liability coverage, for example, could run anywhere from a few hundred to several thousand dollars a year. Factors such as revenue, number of employees, the state where your business is registered and the kinds of work your business performs are key factors.

These decisions can be complex. We can help.

Have You Considered A Custom General Contractor Policy?

USA Business Insurance Services prides itself in providing 100% custom insurance policies based on the needs of your business. We will go over your application and make sure every aspect of your business is properly covered. We’ll make sure you’re paying only for what you need.

Once we’ve put together the right policy for you, you’ll have the peace of mind you need to focus on your business. You focus on your building projects. We’ll focus on you.

How To Get General Contractor Insurance

While most people find it a hassle to get insurance, it doesn’t need to be. You can get a general contractor insurance policy from USA Business Insurance after a simple conversation about your business. We will help you assess your risk and thus help you determine which policies make the most sense for you. We will also help you identify appropriate coverage limits to ensure you are adequately covered.

Once you’ve chosen all of this, you can ask the us to run a couple of different deductible scenarios so that you can ascertain how much, if anything, you want to pay in a claim. Higher deductibles help keep insurance costs down. If you shop for insurance, make sure that the quotes match coverage and limits.

That’s how you compare apples to apples when it comes to business insurance.

Do I Need A Contractor's License To Work?

Bonds and Insurance

What's A General Contractor's Bond

A General Contractor's Bond, often referred to as a surety bond, is a legal agreement that guarantees a general contractor's compliance with state regulations and contractual obligations. It's a three-party contract involving the contractor, the client or obligee, and a surety company.


Refer to Remodeling Contractor Liability Insurance

Additional Endorsements For Your General Contractor Insurance

General contractor insurance might not include specialized endorsements tailored specifically for the following facilities that aim to address any potential risks or exposures related to construction or renovation projects within:

  • Hospital, Medical or Care Facilities
  • School or Recreational Facility
  • Multi-Unit Residential Structures
  • Museums and Historic Buildings and Structures
  • Buildings and Structures Exceeding Three Stories

General Contractor Insurance Claim Scenarios 

Understanding general contractor insurance is vital, but visualizing its application through real-world scenarios can offer clearer insights. Here are some general contractor insurance claim scenarios:

  1. Property Damage: Imagine a contractor working on a home renovation. A misplaced ladder leads to a shattered, antique stained-glass window. The general liability insurance covers the cost of window replacement.

  2. Injury on Site: While constructing a new office space, a brick falls and injures a passerby. The person requires medical treatment. The contractor's general liability policy covers the medical expenses.

  3. Faulty Work: A few weeks after completing a project, a client claims the plumbing work was faulty, leading to water damage in their home. They file a claim against the contractor. Liability Insurance  would kick in to address the lawsuit and potential damages.

  4. Tool Theft: A contractor's van, filled with expensive tools, is broken into overnight, and essential equipment is stolen. Their inland marine policy or contractor's tools & equipment insurance would cover the lost tools' replacement cost.

  5. Employee Injury: An electrician employed by the contractor gets electrocuted during a job and can't work for several weeks. Workers' compensation insurance would cover their medical bills and a portion of their lost wages.

Each scenario emphasizes the value of different types of insurance coverages that general contractors might need, showcasing the importance of a comprehensive insurance plan.

General Contractor Insurance In California

California, with its sprawling construction projects from its golden coasts to the Sierras, relies on general contractors as a vital part of infrastructure progress. These professionals perform numerous duties that range from managing subcontractors and overseeing timely project completion to overseeing risks in their line of work. Given these intricate demands and associated risks in California's construction projects, General Contractor Insurance In California becomes even more crucial as an invaluable safety net specifically tailored for California contractors' unique challenges.

An investment in California General Contractor Insurance is like setting down a solid foundation before undertaking an architectural masterpiece. Imagine, on a busy construction site, an unexpected event occurs - like equipment malfunction or workplace injury - while general contractor insurance stands ready to absorb those financial blows, helping restore projects without major setbacks.

But the benefits of general contractor insurance extend far beyond damage prevention. When clients, whether homeowners or commercial entities, know their general contractor has professional, foresighted, and dedicated coverage in place, it increases client confidence - signaling professionalism, foresight, and dedication that stands them apart in a competitive market and can lead to stronger business relationships, repeat contracts and an excellent standing within Californian construction communities.

From Los Angeles' busy avenues to Silicon Valley's groundbreaking laboratories, construction in California is vast and dynamic. To ensure those at the helm of these projects can move ahead without fear or stress - General Contractor Insurance In California protects contractors against unexpected obstacles while giving them confidence and credibility for successful building practices.

General Contractor Insurance In Florida

Florida, an impressive state known for both architectural marvels and natural splendor, plays host to general contractors who play a pivotal role in shaping its landscape. From working directly with architects to overseeing daily operations, their duties encompass multiple tasks that create diverse challenges for these professionals. Recognizing these difficulties and considering these complexities of Florida construction environments specifically tailored for general contractor insurance is essential protection that offers tailored coverage in terms of Florida-specific construction environments.
General Contractor Insurance in Florida serves as a vital partner, equipping professionals with the assurance they need to tackle projects safely and beautifully - contributing to Florida's continued skyline resurgence in beautiful ways.

General Contractor Insurance In New York

Securing general contractor insurance in New York is like arming oneself with the tools for an arduous build. Imagine working on a busy Manhattan site where unexpected events such as damage to equipment or an on-site accident arises; having insurance can act as a safeguard, cushioning financial impacts while helping your project remain on course seamlessly.

But the impact of general contractor insurance goes beyond mere protection from unexpected events. When clients - from private homeowners in the Hamptons to corporations in downtown NYC - realize that their contractor operates under this protection, trust deepens. It signals professionalism, proactivity, and dedication towards excellence qualities essential in New York's competitive construction industry.

General Contractor Insurance In New York provides contractors with the confidence and backing they need to bring architectural dreams to fruition in this vibrant state.

General Contractor Insurance In Oregon

Having General Contractor Insurance In Oregon is akin to wearing the best safety gear while scaling the state's highest peaks, it provides vital security. Imagine a site set against the backdrop of Portland's skyline or the tranquil coasts of Cannon Beach. Mid-project, an unexpected setback occurs, perhaps due to material damage from Oregon's unpredictable weather or a sudden on-site mishap. This insurance emerges as the first responder, addressing unforeseen costs and ensuring the project progresses smoothly.

Beyond the immediate reactive benefits, there's a proactive side to this insurance. Clients, whether they're families aspiring to nestle among the Douglas firs or businesses aiming to flourish in Eugene's vibrant districts, feel reassured knowing their general contractor is well-insured. It's a mark of professionalism, dedication, and foresight, attributes that can significantly elevate a contractor's standing in Oregon's diverse construction landscape.

General Contractor Insurance In Texas

Acquiring General Contractor Insurance In Texas is akin to selecting the strongest beams for a structure—it offers steadfast support. Visualize a site in bustling Dallas or laid-back Austin, where amidst the orchestrated dance of construction, a sudden unexpected event unfolds. Maybe it's a gust of Texas wind that damages materials or an unforeseen site incident. This insurance stands as a sentinel, tackling those unplanned costs and ensuring that the project's trajectory remains unaffected.

But the spectrum of this insurance's benefits spans even further. For clients—be it a family building their dream ranch or a corporation erecting a modern facility in Houston—knowing their general contractor is backed by such comprehensive insurance instills confidence. It's a testament to professionalism, foresight, and dedication, pivotal in enhancing client trust and elevating a contractor's stature in Texas' dynamic building sector.

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