Contractor Liability Insurance: What It Covers & How Much It Costs
If you’re a general contractor, electrician, plumber, HVAC pro, painter, mason, or handyman, contractor liability insurance is your everyday shield against costly claims. This copy-and-paste blogger post explains coverage in plain English, shows pricing signals, helps you choose limits and endorsements, compares five insurers, and ends with a ready-to-use quote CTA and FAQ schema for SEO.
What’s inside
Contractor liability insurance—basics
Contractor liability insurance, commonly a Commercial General Liability (CGL) policy, helps pay for claims of third-party bodily injury, third-party property damage, and personal/advertising injury that arise from your ongoing operations or completed work. It’s the policy most clients and municipalities ask for before you step on site—typically evidenced by a Certificate of Insurance (COI).
It is different from and complementary to:
- Workers’ Compensation – employee injuries and lost wages.
- Commercial Auto – vehicles titled to your business.
- Tools & Equipment (Inland Marine) – mobile gear and small tools.
- Builders Risk – property under construction.
- Professional Liability (E&O) – design/spec/consulting mistakes.
- BOP (Business Owner’s Policy) – value bundle (GL + business property).
What general liability typically covers
Covered
- Third-party bodily injury (client trips on your cord and breaks an ankle).
- Third-party property damage (you crack a countertop; a valve test floods a room).
- Personal & advertising injury (libel/slander, ad copyright disputes).
- Premises & operations and completed operations claims.
- Products liability tied to materials you supply/install.
- Legal defense costs (per your policy form and limits).
Not covered (separate policies)
- Your/employee injuries → Workers’ Comp.
- Your vehicles → Commercial Auto.
- Your tools/equipment → Tools & Equipment (Inland Marine).
- Property under construction → Builders Risk.
- Design/consulting errors → Professional Liability (E&O).
- Intentional acts, guarantees → typical exclusions apply.
Always verify your own policy wording—forms and endorsements vary by insurer and state.
How much contractor liability insurance costs
For many small contractors, a standard $1M per occurrence / $2M aggregate general liability policy often falls roughly in the $50–$120 per month band. Riskier trades (roofing, structural, demo) trend higher; lighter-risk trades (painting, flooring, cleaning) trend lower—subject to location, payroll/revenue, limits, and endorsements.
8 factors that move your premium
- Trade/class code risk: roofing/structural/demo > painting/flooring/cleaning.
- Annual revenue & payroll: more volume and crews = more exposure.
- Subcontractors: carriers want hold-harmless + proof of sub GL with AI/waiver.
- Limits & deductibles: higher limits and lower deductibles raise cost.
- Claims history: losses and OSHA issues increase rates.
- Location & project type: dense/urban and residential can be more litigious.
- Policy form & endorsements: per-project agg, P&NC, specific AI wording add premium.
- Safety culture: documented training and QC can help underwriting.
Choosing limits, deductibles & key endorsements
Common limits
- $1M / $2M for many small contractors.
- $2M / $4M for larger bids or municipal work.
- $5M+ via umbrella when contracts require it.
Ask for a per-project aggregate so one job’s claim doesn’t erode limits for other jobs.
Must-know endorsements
- Additional Insured (AI): adds your GC/owner for your negligence.
- Primary & Non-Contributory: your policy responds first.
- Waiver of Subrogation: carrier won’t seek recovery from the AI.
- Completed Operations AI: protects AI after hand-off.
- Per-Project Aggregate: separate aggregate limit per job.
Real-world claim examples by trade
General contractor
Visitor slips on dust at a stair landing and fractures a wrist. Medical bills and defense fall under bodily injury (subject to terms and limits).
Electrician
Arc damages finished cabinetry during a panel swap. Property damage and cleanup addressed by GL (policy specific).
Flooring
Adhesive overspray damages baseboards and nearby furniture—third-party property damage.
Plumber
A compression fitting fails two weeks after completion, flooding a condo. Completed operations responds.
Painter
Overspray coats vehicles on an adjacent lot—property damage plus defense costs.
HVAC
Roof curb installation leaks after hand-off, leading to interior damage; handled as a completed-ops claim.
How to reduce cost without cutting protection
- Bundle smart: a BOP can price better than standalone GL + property when you have insurable contents/tools.
- Tighten subcontracts: use hold-harmless and require AI/waiver from every subcontractor.
- Pick a sensible deductible: higher deductibles reduce premium—balance with cash flow.
- Annual pay-in-full: some carriers discount for single-pay.
- Prove safety: keep records of training, JHAs, hot-work permits—share during underwriting.
- Compare apples to apples: identical limits and endorsements across all quotes.
Compare 5 contractor liability insurers
| Insurer | Best for | Typical GL price signal* | Highlights | Notes |
|---|---|---|---|---|
| The Hartford | Established small–mid contractors; broad appetite | Mid-range; construction classes trend higher than office/retail | Strong claims; robust endorsements; BOP/Workers’ Comp bundles | Ask for per-project aggregate + completed-ops AI |
| NEXT Insurance | Digital-first quoting; fast COIs; small crews | Competitive for micro/solo shops | In-app COIs; monthly billing; trade-specific pricing | Confirm big-GC endorsement wording pre-bind |
| Hiscox | Very small businesses; hybrid trades + consulting | Entry-level for lighter-risk classes | Strong pairing with professional liability (E&O) | Check construction appetite in your state |
| Thimble | Short-term jobs; solos & micro-shops | Pay-by-job/month; good for intermittent work | Instant COIs; flexible terms | For multi-month projects, compare to annual policies |
| biBERK (Berkshire Hathaway) | Direct-to-buyer; budget-focused | Often competitive starting premiums | No broker fees; strong financial backing | Confirm contractor-class eligibility & endorsements |
*Not a quote. Pricing varies by class code, limits, state, payroll/revenue, subs, and loss history. Always request customized quotes.
Quote CTA (copy & paste into proposals)
Get 3 contractor liability insurance quotes with $1M / $2M limits and standard endorsements (Additional Insured, Waiver of Subrogation, Primary & Non-Contributory, Per-Project Aggregate). Turnaround is usually quick once you share revenue, payroll, trade details, and subcontractor info.
Attach your project scope and any GC/owner insurance requirements to your quote request to avoid re-quotes.
Step-by-step: buying contractor liability insurance
- List exposures: trades, heights, hot work, residential vs. commercial, typical contract size.
- Choose limits: start at $1M/$2M; add umbrella when contracts demand higher totals.
- Gather data: FEIN, years in business, payroll, revenue, subcontractor cost, 5-year loss runs.
- Get at least 3 quotes: keep limits/endorsements identical across submissions.
- Review endorsements: confirm AI (ongoing + completed ops), P&NC, waiver, per-project aggregate.
- Bind & issue COIs: store COIs by project and calendar renewal dates.
Beyond general liability: stackable coverages
Professional Liability (E&O)
Protects against financial loss from professional errors—useful for design-build firms, project managers, and consultants.
Workers’ Compensation
Employee injuries and lost wages (statutory). Many jurisdictions mandate coverage even for a single employee.
Commercial Auto
Coverage for company-owned vehicles used for work. Ask about telematics or fleet-safety discounts.
Tools & Equipment
Inland marine coverage for mobile gear and small tools. Some carriers offer blanket limits for low-value items.
Builders Risk
Protects property under construction from perils like fire, theft, and some weather—policy specific.
Business Owner’s Policy (BOP)
Bundle of GL + property. Can beat piecemeal pricing if you keep stock, tools, or office contents.
Contractor Liability Insurance — FAQs
What does contractor liability insurance cover?
It covers third-party bodily injury, third-party property damage, and personal/advertising injury caused by your operations or completed work. It also pays legal defense costs, up to policy limits.
How much does contractor liability insurance cost ?
A common range for small contractors is about $50–$120 per month for a $1M/$2M general liability policy. Your exact price depends on trade, location, payroll/revenue, endorsements, and claims history.
Is professional liability the same as general liability?
No. General liability responds to injuries and property damage to others. Professional liability (E&O) addresses financial loss from professional mistakes, such as design or specification errors.
Which endorsements do owners and GCs usually require?
Common requirements include Additional Insured (ongoing & completed operations), Waiver of Subrogation, Primary & Non-Contributory wording, and a Per-Project Aggregate limit.
How do I provide proof of insurance?
Provide a Certificate of Insurance (COI) naming the client/GC as certificate holder and include any required endorsements.
Do I need coverage for small residential jobs?
Yes. Even small jobs involve trip hazards, water damage risk, and advertising-injury exposure. Many homeowners require proof of GL before work.
Will my policy cover subcontractors?
Subcontractors usually must carry their own GL with equal or higher limits and proper endorsements. Collect and track COIs from every sub.
Final word
Contractor liability insurance is the foundation of a durable risk strategy. Pair it with the right endorsements, push strong safety practices, and treat subcontractor risk transfer as non-negotiable. With clean documentation and apples-to-apples quotes, you can control cost without sacrificing protection.
Disclaimer: This article is for general education and marketing purposes only. It is not legal, tax, or insurance advice. Coverage and pricing vary by insurer, form, and jurisdiction. Read your policy and endorsements carefully.