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General Liability Insurance Cost For Contractors: Rates and Coverage

Benjamin Knox | Last updated Sunday, August 27th, 2023

In the unpredictable realm of contracting, safeguarding your business isn't a luxury – it's a necessity. General liability insurance acts as your safety net, ensuring that unforeseen claims don't topple your hard-earned success. Remember, it's not just an expense, it's a strategic investment that secures your present and shields your future.

Now, let's tackle the big question: how much? The cost of general liability insurance for contractors doesn't follow a cookie-cutter model. The digits dance to the tune of various factors – policy limits, deductibles, insurers, business location, risk level, and the nature of the contracting work.

For the specifics, let's turn to Insureon, a respected digital insurance broker. They spill the beans: general contractors typically dish out a median monthly premium of approximately $90. That's roughly $1,090 annually. This ballpark figure covers a policy boasting a $1 million per occurrence limit along with a $500 deductible.

Now, let's discuss the returns on this investment. General liability insurance isn't just a cost; it's an assurance against a spectrum of scenarios. It blankets injuries endured by clients, customers, and delivery personnel on your premises. It guards against property damage resulting from your actions or those of your team. Even slip-ups in advertising and communication are within its protective scope.

How Much Does General Liability Insurance Cost For A Contractor?

Evidently, the financial tapestry of general liability insurance is woven with diverse threads. Contractors, regardless of their niche, benefit from understanding the financial aspects. Whether you're sculpting with wood, radiating cleanliness, or raising structures, safeguarding your enterprise isn't just a box to tick – it's a strategic investment in enduring success.

1. Carpenter Contractors

Carpenters weave wonders with wood, and their general liability insurance costs reflect that diversity. According to Insureon, the median premium for carpenters hovers under $70 per month or approximately $835 annually.

This package includes a $1 million per occurrence limit and a $500 deductible. Rates vary based on project nature and property types, adding a touch of flexibility to the equation.

2. Cleaner Contractors

For cleaning and janitorial businesses, keeping spaces spotless goes hand in hand with insurance. Insureon's data reveals that these businesses typically pay under $45 per month or around $530 per year for general liability insurance.

This umbrella caters to a spectrum of budgets. Sixteen percent enjoy coverage under $500 yearly, while 69 percent allocate between $500 and $1,000. Only 15 percent surpass the $1,000 mark. Size and clientele dictate these premium fluctuations.

3. Construction Contractors

Construction is a realm where risks loom large, influencing insurance costs. Insureon showcases that construction businesses spend under $70 per month or approximately $825 annually on general liability insurance.

Within this realm, 24 percent secure coverage under $600 yearly, while 48 percent budget between $600 and $1,200. Roughly a quarter, often those facing higher risks or boasting a larger profile, invest over $1,000 for comprehensive coverage.

4. Electrician Contractors

Electricians illuminate our lives, and their insurance costs shed light on their financial security. Clocking in at an average of $45 monthly or approximately $540 annually, electricians secure general liability protection.

This coverage encompasses a $1 million limit per year, coupled with a $500 deductible, offering peace of mind in the midst of sparks and circuits.

5. Excavator Contractors

For excavation companies, insurance isn't just a hole to fill – it's a strategic investment. Farmer Brown's insights reveal that the average premium for a standard small excavation company with limits of $2 million per year and $1 million per occurrence spans from $83 to $127 monthly.

This range varies based on a slew of factors including business location, size, payroll, sales, years of experience, and claim history, creating a tailored pricing tapestry.

6. Handyman Contractors

Handymen weave together various skills, and their insurance costs are no exception. According to Insureon, handymen typically dedicate around $65 monthly or $800 annually for general liability protection.

This safeguard encompasses a $1 million per occurrence limit and a $500 deductible. Whether fixing leaks or patching walls, this coverage is the glue that holds their business resilience together.

7. HVAC Contractors

For HVAC contractors, balancing temperatures is accompanied by financial equilibrium. The General Liability website reveals that the average cost for a standard general liability policy with limits of $2 million per year and $1 million per occurrence spans from $37 to $59 monthly.

Business location, size, payroll, sales, and experience compose the nuanced backdrop of these pricing variations.

8. Landscaping Contractors

Landscaping businesses weave nature's beauty with financial prudence. Insureon data showcases that these experts allocate around $45 monthly or $530 annually for general liability protection.

This standard policy encompasses a $1 million per occurrence limit, $1 million in aggregate limit, and $500 deductibles, ensuring that the lush gardens they create are nurtured by a safety net.

9. Painter Contractors

Painters bring walls to life, and their insurance costs safeguard that artistry. According to Insureon, coverage for sign painters, paperhangers, and house painters is priced at about $50 monthly or $600 annually.

This protective cocoon entails a $1 million per occurrence limit coupled with a $250 deductible, shielding their work from the unexpected.

10. Plumbing Contractors

For plumbers, financial stability runs parallel to water flow. Insureon data reveals that plumbers typically allocate less than $125 monthly or around $1,480 annually for general liability insurance.

This coverage envelopes a $1 million per occurrence limit and a $500 deductible, ensuring that both pipes and pockets are safeguarded.

11. Roofing Contractors

Roofing businesses face a unique set of risks, echoing in their insurance costs. According to Insureon, roofing contractors invest approximately $300 monthly or $3,590 yearly for general liability protection.

This robust coverage package incorporates a $1 million per occurrence limit alongside a relatively high $1,000 deductible, mirroring the elevated risks linked with roofing endeavors.

What Does General Liability Insurance Cover for Contractors?

Contractors know that the construction realm is a blend of precision and unpredictability. General liability insurance is your business's armor against a spectrum of claims:

1. Bodily Injury

Accidents can occur on the job site. Whether a client, customer, or third party sustains injuries, this coverage takes care of medical expenses, legal fees, and settlements.

2. Property Damage

Mistakes or mishaps can lead to damage to someone else's property. From a misplaced tool to more substantial damage, this coverage safeguards your financial stability.

3. Personal Injury

In a world of words, misunderstandings can lead to claims of libel or slander. This coverage handles legal expenses should you find yourself facing such allegations.

Factors Affecting the Cost of General Liability Insurance for Contractors?

General liability insurance acts as a financial safety net, but understanding the factors that influence its costs is essential for making informed decisions. Let's unravel the intricacies that impact your general liability coverage premiums.

1. Size of Business

The size of your contracting business isn't just a metric; it's a pivotal cost determinant. Larger businesses often necessitate more comprehensive insurance, translating to higher costs. It's not just about the workforce – a larger client base can escalate the risk of lawsuits and claims, adding weight to your general liability premium.

2. Insurer Selection

Insurance companies operate with unique calculations and preferences. These discrepancies are reflected in the quotes they provide. It's in your best interest to cast a wide net, collecting quotes from various insurance providers. This proactive approach allows you to understand the spectrum of costs and tailor your choice accordingly.

3. Number of Employees

The number of employees isn't just a headcount – it's a risk factor. The more individuals involved, the higher the risk profile. This translates to adjustments in your general liability insurance cost.

4. Experience Matters

Your contracting journey's duration matters. An established track record can influence your general liability insurance cost, as longer experience might reflect a more cautious and adept approach.

5. Location Impact

Geography has a role to play. Areas with higher crime rates can bump up your insurance costs, reflecting the increased risk of incidents.

6. Policy Details

Policy specifics like coverage limits and deductibles wield considerable influence. Extensive coverage coupled with a low deductible can elevate rates. Carefully balance your coverage needs to align with your budget.

7. Claims History

Past claims are future predictors. A history of claims indicates a propensity for future claims. Minimize preventable incidents to avoid unnecessary claims that can inflate your insurance costs.

8. Credit Score

The credit score of the policyholder, whether a contractor or business owner, factors in. A higher credit score signals reliability in premium payments and responsible behavior. Conversely, a lower score increases perceived risk, influencing the general liability insurance cost.

Why Contractors Need General Liability Insurance?

While the law might not demand it, clients and landlords frequently do. Most clients and landlords consider general liability insurance a non-negotiable requirement before any contract is signed. This demonstrates your commitment to responsible business practices and safeguards the interests of all parties involved.

Picture this: a client's priceless vase accidentally shatters under your watch, or a passerby takes a tumble on your construction site. These scenarios might seem unlikely, but mishaps are unpredictable. According to industry data, slip and fall accidents are the leading cause of general liability claims, making up 10% of cases. Meanwhile, property damage accounts for 27% of claims, underlining the importance of having coverage.

Nearly 80% of clients prefer working with contractors who are insured. This is hardly surprising given that 56% of clients believe that contractors should carry liability insurance to offer a sense of security. Your clients want to know that you've got their back in case of mishaps.

General liability insurance complements the layers of protection you've already put in place, such as workers' compensation and commercial vehicle insurance. In fact, it ranks as one of the top coverages for contractors. Remember, it's not just about protecting your business; it's about fortifying your reputation and financial stability.

Unforeseen accidents can disrupt even the most meticulously planned projects. The numbers speak for themselves: 53% of small businesses face at least one lawsuit in their lifetime, with the average cost hovering around $54,000. Don't gamble on the chance of financial ruin when a simple, yet powerful solution is at your disposal.

Top General Liability Insurance Companies for Contractors

The plethora of options on the market, finding the right provider can feel like searching for a hidden treasure in a vast landscape. Fear not, for we've donned our investigative hats and unearthed the gems among insurers offering contractors general liability coverage.

1. CoverWallet: Best for comparing several quotes

Comparing quotes is like scouting the terrain before building – essential for a solid foundation. CoverWallet stands out as a beacon in this realm. With a user-friendly interface, it allows you to survey multiple quotes, empowering you to make an informed decision tailored to your specific needs. In a bustling market, this is the compass that keeps you on course.

2. Simply Business: Best for low-cost coverage

Cost-effective solutions without compromising quality – that's the niche Simply Business has mastered. Cost concerns can often be a stumbling block, but this provider removes the hurdle.

In a study of contractors, 74% admitted to cost being a decisive factor when choosing an insurance provider. Simply Business caters to this concern without sacrificing coverage, ensuring your budget stays as robust as your project.

3. InsurePro: Best for flexible on-demand coverage

Life in construction is as diverse as the projects you undertake. Sometimes, you need coverage on-demand, aligning with the ebbs and flows of your work. InsurePro steps in as the agile solution, providing the flexibility you crave.

In a field where adaptability is key, having an insurance partner that mirrors this trait ensures you're always prepared.

4. Next: Best Overall

Sometimes, a name lives up to its promise. Next isn't just a catchy title; it's the embodiment of comprehensive coverage. In the competitive realm of general liability insurance, Next takes the lead.

A 2022 survey revealed that 87% of contractors value comprehensive coverage, making it the crown jewel. When your business's future is at stake, Next ensures you're covered from all angles.

5. Thimble: Best for part-time contractors

Part-time contractors often find themselves navigating unique challenges. Enter Thimble, the provider that caters to your schedule. Balancing work and life is a tightrope act; Thimble ensures your coverage matches this rhythm.

A whopping 40% of contractors juggle multiple gigs, a testament to the changing landscape of work. Thimble adapts to your beat, giving you the protection you need, precisely when you need it.

Additional Liability Insurance Coverage for Contractors

While a general liability insurance policy is a vital foundation, it's essential to explore additional coverage options to ensure your business is well-protected. Here's a closer look at key types of coverage that can fortify your contractor insurance portfolio:

1. Commercial Property Insurance

Your business relies on a range of assets, from computers and tablets to tools and heavy equipment. Commercial property insurance steps in to shield these essential items, whether you own or lease them.

This coverage not only guards against damage but also provides financial support for replacing or repairing critical assets. With the unpredictable nature of accidents, having a safety net for your equipment can prevent significant setbacks.

2. Business Income Insurance

Disasters can strike unexpectedly, halting your business operations. Business income insurance acts as a safety net during such disruptions.

If your operations are temporarily suspended due to covered property damage, this insurance can bridge the gap by covering lost income. It ensures that even during challenging times, your revenue stream remains steady, allowing you to recover without worrying about financial strain.

3. Data Breach Insurance

In the era defined by bits and bytes, ensuring the security of delicate information stands as an undeniable imperative. Data breach insurance, sometimes referred to as cyber insurance, provides a shield against the potentially devastating consequences of a data breach.

If personally identifiable information falls into the wrong hands, this coverage assists in managing the fallout. Given the rising number of cyber threats, having this protection is becoming increasingly vital for contractors who handle client information online.

4. Workers’ Compensation Insurance

Your workforce is the backbone of your business, and their well-being is crucial. Workers’ compensation insurance, often known as workers’ comp, is designed to support your employees in case of work-related injuries or illnesses.

This coverage not only aids in covering medical expenses but also offers benefits to aid in their recovery and return to work. By providing a safety net for your team, you demonstrate your commitment to their welfare while safeguarding your business from potential legal and financial implications.

Tips to Find Affordable General Liability Insurance for Contractors

Affordable general liability insurance for contractors isn't an elusive dream. By embracing these strategies, you're arming yourself with tools to navigate the financial landscape while ensuring your business's stability. Remember, your contracting prowess is matched by your ability to make savvy insurance decisions.

1. Comparison is Key: Seek the Best Value

Don't settle for the first quote that lands on your desk. Instead, gather multiple quotes to compare coverage and prices. Brokerage services like CoverWallet,, or streamline this process, presenting you with a buffet of quotes to peruse.

This easy comparison helps you unearth the best and most economical option for your contracting business.

2. Continual Search: Keep Exploring

The insurance market is ever-evolving, and so are the quotes and rates. Don't rest after securing coverage – continue to shop around. Before your policy renewal, seek fresh quotes. The fluctuations over 12 months mean that new quotes could bring a cheaper alternative to the forefront.

3. Embrace Discounts: Unlock Savings

Discounts are your allies in the quest for affordable coverage. While not always highlighted during the initial quote, don't hesitate to inquire about available discounts. Whether buying online or through an agent, ask about these cost-reducing opportunities.

Insurance companies maintain a list of discounts, and you should capitalize on any that align with your business.

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