The coverage types a contractor actually needs
Contractor insurance is a bundle of separate policies. Here's what each one does.
General liability (GL). Pays for injuries to other people and damage to their property caused by your work. A ladder falls through a customer's skylight, a homeowner trips over your hose, a water line you installed fails and floods the basement after you leave (that last one is "completed operations" coverage). It does not cover your own tools, your employees' injuries, your vehicles or the cost of redoing bad work. Most GCs and property managers won't let you on site without a GL certificate.
Workers' compensation. Pays medical bills and lost wages for employees hurt on the job, and generally protects you from being sued over those injuries. Required in most states once you have employees. Premiums are based on payroll and job classification, so a roofing crew costs much more to cover than an office manager.
Commercial auto. Covers trucks and vans used for work, and employees driving them. Personal auto policies often exclude or limit business use, which is a common and expensive surprise after an accident on the way to a job.
Tools and equipment (inland marine). Covers tools and equipment that move between job sites, against theft or damage. A stolen trailer of tools can cost more than a year of premiums. GL won't cover it.
Contractor bonds. License and permit bonds are required by many states and cities to get or keep a license. Performance and payment bonds are required on many public and larger commercial jobs. A bond isn't insurance: if the surety pays a claim, you owe it back.
Other coverage worth knowing. A business owner's policy (BOP) bundles GL with property coverage for a shop or office. Professional liability covers design, estimating or consulting mistakes, which matters for design-build remodelers and HVAC load calculations. An umbrella policy adds limits on top of GL and auto when a contract requires higher limits than your base policy.
Requirements vary by state and by contract
There's no single national rule. Your state licensing board may require proof of GL or a bond before it issues a license, and the required amounts differ by state and trade. Workers' comp rules differ on how many employees trigger coverage, whether owners must be covered and how subcontractors are treated. Some cities add their own bond or insurance requirements for permits.
Contracts often matter more than law. A GC, a property manager or a commercial client will usually spell out the limits they require, and ask to be named as an additional insured. Read the insurance section of a contract before you sign it, and send it to your agent or insurer. Adding an endorsement after the fact can delay your first day on site.
What drives the price
We won't quote average premiums, because there's no credible single number for "contractor insurance." Your price comes from a handful of factors:
- Trade classification. The biggest one. Roofing, tree work and anything at height price far above painting or cleaning.
- Revenue and payroll. GL is often rated on revenue and workers' comp on payroll, so premiums grow as you do.
- Claims history. A clean record lowers your rate; a recent claim raises it.
- Location. State rules, local costs and claim environments vary.
- Limits and deductibles. Higher limits cost more; higher deductibles cost less.
- Use of subcontractors. Uninsured subs can be counted against your policy at audit.
The only published numbers among our picks, as of October 2026: NEXT says general liability starts at $19/mo, Hiscox says general liability starts at $30/mo, and Gusto offers pay-as-you-go workers' comp through NEXT starting at $14/mo. Thimble now lists general liability from $17/mo (checked November 2026). biBERK and Insureon don't publish starting prices. Treat every "starting at" figure as the floor for the lowest-risk trades.
Where the risk sits by trade
Underwriters price each trade by what tends to go wrong. Knowing your trade's weak spot helps you read a quote and spot a missing endorsement.
HVAC. Gas lines, rooftop units and refrigerant work. A furnace install that leads to a carbon monoxide claim is a completed-operations claim, so make sure that coverage is in the policy. Crane lifts for rooftop units may need special coverage or a crane company with its own.
Plumbing. Water damage, often discovered weeks after the job. A failed fitting behind a finished wall is the classic plumbing GL claim. Ask how the policy treats damage that shows up long after you've left.
Electrical. Fire risk from faulty work and injury risk to others on site. Electricians on commercial jobs are often asked for higher limits, which is where an umbrella policy comes in.
Roofing. Falls, height and weather damage to an open roof. Many online insurers exclude or decline roofing, and those that accept it price it much higher than the "starting at" numbers. Expect to use a multi-carrier agency or a specialist.
Landscaping and lawn care. Thrown rocks from mowers, damaged irrigation, and trailers full of equipment. If you apply pesticides or herbicides, ask whether the GL policy excludes it; many states license applicators separately.
Cleaning. Low liability risk, but theft accusations are common. Many cleaning companies buy a janitorial bond, which some clients ask for before letting a crew into a home or office.
Keeping it current
Insurance isn't a buy-once purchase. Put the renewal date on the calendar 45 days ahead and get at least one competing quote each year. Tell your insurer when revenue or payroll changes significantly mid-year; it's cheaper than an audit adjustment. Keep a folder of every certificate you've issued to GCs and every certificate you've collected from subs, with expiration dates, so nobody's working on an expired policy.
How the picks compare
NEXT is the best starting point for most small contractors because it covers the full set (GL, workers' comp, auto, tools) online with instant certificates. Hiscox is a strong alternative for lower-risk trades and anyone who also needs professional liability. Thimble fits part-time or project-based work where an annual policy doesn't make sense yet. biBERK is a direct carrier worth one comparison quote. Insureon is the efficient way to get several carriers to quote at once, which matters most when the direct sellers decline your trade or price it high.
A sensible approach: get one quote from NEXT or Hiscox, one from biBERK, and one multi-carrier quote through Insureon or a local independent agent. Compare the policies line by line, not just the premium.
Buying checklist
- Match your exact trade classification. A "handyman" policy may exclude the roofing or electrical work you actually do.
- Check the limits your contracts require, commonly expressed per occurrence and in aggregate, before you choose.
- Ask about additional insured, waiver of subrogation and primary and noncontributory endorsements. GCs often require all three, and not every online policy includes them.
- Read the exclusions. Look for height limits, residential construction exclusions, and exclusions for work done by subcontractors.
- Confirm completed operations coverage, so a leak six months after the job is covered.
- Find out how certificates are issued. Instant online certificates save days when a GC asks.
- Collect certificates from your subs and track expiration dates. An uninsured sub can become your problem at audit.
- Ask how claims are reported and whether there's a phone number with a person on it.
