Business
Contractor Insurance: What It Costs and What You Need
Published September 24, 2026 · Last updated September 30, 2026
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The short answer
Contractors pay about $83 a month for general liability insurance, based on Insureon's customers. Most contractors need more than one policy, though. The usual set is general liability, workers' comp if you have employees, commercial auto for work vehicles, and coverage for your tools.
Clients, general contractors, and many state licensing boards will ask for proof before you start work.
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What contractor insurance costs
Price range
Here's what contractors paid per month for each policy, on average:
| Policy | Per month | Per year |
|---|---|---|
| General liability | $83 | $990 |
| Business owner's policy (BOP) | $115 | $1,374 |
| Workers' comp | $160 | $1,916 |
| Commercial auto | $270 | $3,239 |
| Tools and equipment | $42 | $502 |
| Professional liability | $58 | $702 |
| Commercial umbrella | $92 | $1,102 |
| Builder's risk | $117 | $1,398 |
| Surety bond | $9 | $112 |
Not a quote or an offer. Your price comes from the insurance company. Source: Insureon, 2026 (median cost for its contractor customers).
What moves the number
- Your trade. Roofing and structural work cost more to cover than painting or flooring.
- Your payroll and sales. More workers and bigger jobs mean more risk.
- Where you work. State rules and local claim costs vary.
- Your claims history.
- Your limits. A typical general liability policy for contractors is $1 million per claim and $2 million per year.
Which policies contractors need
General liability. Pays if you hurt someone or damage a client's property on the job. Think of a ladder falling onto a client's car. It's the policy clients ask for first. See general liability insurance.
Workers' comp. Pays medical bills and lost wages if a worker gets hurt on the job. Many states require it once you have employees. Construction rules are often stricter. See workers' comp.
Commercial auto. Covers trucks and vans you use for work. A personal auto policy may not cover business use. See commercial auto insurance.
Tools and equipment. Pays to repair or replace tools that are stolen or damaged, on the job or in your truck. This is usually an inland marine policy. See inland marine insurance.
Builder's risk. Covers a building while it's being built or remodeled. See builder's risk insurance.
Surety bonds. Some states and cities require a license bond. A bond protects your client, not you. If you don't finish the job or follow the rules, the client can make a claim, and you have to pay the bond company back. See surety bonds.
Business owner's policy (BOP). Bundles general liability with coverage for your own office or shop, often for less than buying both separately. See business owner's policy.
What some states require
Licensing rules vary a lot. A few examples:
- California: licensed contractors must file a $25,000 contractor's bond. They must also show proof of workers' comp, or file an exemption if they have no employees. Roofers and some other trades can't use the exemption.
- Florida: construction businesses with even 1 employee, counting the owner, must carry workers' comp.
- Texas: most private employers can choose whether to carry workers' comp. Contractors working on government projects must carry it for employees on the project.
Check your state licensing board and your city before you bid.
What to ask before you choose
- "Can you add my client or the general contractor as an additional insured?" Many contracts require it.
- "How fast can I get a certificate of insurance?" That's the one-page proof clients ask for.
- "Does this cover the work I do, like roofing or electrical?" Some policies exclude certain trades or types of work.
- "Does my general liability cover damage after the job is done?" This is called completed operations coverage.
- "Would a BOP cost less than separate policies?"
The catch: a cheap policy that excludes your main type of work is worth very little. Read the list of excluded work before you buy, and make sure your trade is named correctly.
Keep reading
Starting out? See how to start an LLC and small business insurance cost. Need gear? Compare equipment financing. Doing smaller jobs? See handyman insurance.
Insurance by trade: Builder's risk · Lawn care and landscaping · Cleaning business insurance · Handyman insurance · Food truck insurance · All business services
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