As a contractor, understanding what you’ll pay for insurance is one of those things that can feel overwhelming — but it doesn’t have to be. The truth is, contractors insurance costs vary a lot depending on what you do, where you work, and how big your operation is. This guide breaks it all down: average costs, state-by-state rates, the factors that move the needle on your premium, and how to make sure you’re getting the right coverage without overpaying.
What is the average cost of contractors insurance?
Most contractors pay between $500 and $1,500 per year for a basic policy, or roughly $40 to $125 per month, though your actual premium depends on your specific business.
Most contractors pay somewhere between $500 and $1,500 per year for a basic policy, which is similar to what you might see in How Much Is DJ Insurance?. Broken down monthly, that’s roughly $40 to $125 per month. But those numbers are a starting point, not a finish line — your actual premium could land above or below that range depending on the specifics of your business.
A one-person painting contractor with a few brushes and a van is going to pay a lot less than a roofing company with five employees and $50,000 worth of equipment. The risk profile is just completely different.
What’s another name for contractors insurance?
You’ll hear a few different terms tossed around: construction insurance, builder’s risk insurance, tradesman insurance, artisan contractor insurance. In most cases, people are referring to the same general concept — a bundle of coverages designed to protect a contracting business from the usual hazards of the trade.
Why Is Contractors Insurance More Expensive Than General Liability Insurance
Contractors insurance tends to be more expensive than general liability insurance because it covers a broader range of risks. While general liability insurance covers third-party injuries and property damage, contractors insurance also includes coverage for tools, equipment, and completed operations. This additional coverage increases the overall cost of the policy.
THE SIMPLY INSURANCE WAY
Why does contractors insurance cost more than a basic general liability policy?
A standard general liability (GL) policy covers third-party injuries and property damage — someone slips at your job site and sues you, for example. Contractors insurance typically layers on top of that, adding coverage for tools and equipment, completed operations (claims that arise after a job is done), and sometimes commercial auto or workers’ comp. More coverage = more premium. It’s that simple.
How much does contractors insurance cost per month?
Here’s a quick snapshot of what monthly costs typically look like based on business size:
| Business profile | Estimated monthly cost |
|---|---|
| Solo contractor, low-risk trade (painting, carpentry) | $40 – $65 |
| Solo contractor, higher-risk trade (roofing, electrical) | $70 – $110 |
| Small business, 2–5 employees | $90 – $150 |
| Mid-size business, 6–15 employees | $150 – $300+ |
These are general ranges. The only way to know your actual number is to get a quote — but this gives you a reasonable ballpark before you start shopping.
How much is contractors insurance by state?
State regulations, local lawsuit trends, and regional risk factors all push premiums up or down. Here’s what you can generally expect in a few of the bigger states.
How much does contractors insurance cost in California?
California tends to run on the higher end — expect to pay $600 to $1,800 per year. The state has strict licensing requirements, a higher cost of living, and a more litigious legal environment, all of which push premiums up.
How much is contractors insurance in Georgia?
Georgia is more affordable, with most contractors paying $500 to $1,500 per year. Regulations are less stringent and the overall cost of doing business is lower than on the coasts.
Florida sits in the $550 to $1,600 per year range. The state’s exposure to hurricanes and other severe weather means insurers price in higher catastrophe risk, especially for anything involving property coverage.
How Much Is Construction Insurance
Construction insurance costs vary based on your work type, with residential contractors typically paying less than commercial ones due to lower risk levels.
Construction insurance, which is another term for contractors insurance, generally falls within the same price range. However, the specific costs can vary based on the type of construction work you do. For example, residential contractors might pay less than commercial contractors due to the different levels of risk involved.
How much is artisan contractor insurance in Texas?
Texas has a competitive insurance market, which helps keep costs reasonable. Artisan contractors (plumbers, electricians, tile setters, etc.) typically pay $450 to $1,200 per year. Texas also doesn’t mandate workers’ comp for most private employers, which gives contractors some flexibility — though skipping it is a real gamble if someone gets hurt.
Average cost of contractors insurance by state
| State | Estimated annual cost |
|---|---|
| California | $600 – $1,800 |
| Florida | $550 – $1,600 |
| Georgia | $500 – $1,500 |
| Texas | $450 – $1,200 |
| New York | $700 – $2,000 |
| Illinois | $500 – $1,400 |
| Pennsylvania | $480 – $1,350 |
These are general estimates. Your actual cost depends on your trade, your claims history, your payroll, and the specific coverages you choose.
What types of insurance do contractors actually need?
Contractors insurance isn’t just one policy — it’s usually a combination of coverages. Here’s what the core lineup looks like:
General liability insurance is the foundation. It covers you if your business causes injury to someone or damages their property. Picture this: you leave a toolbox on a client’s driveway, they back over it, and their car is damaged. General liability handles that claim.
Workers’ compensation insurance covers medical bills and lost wages if one of your employees gets hurt on the job. In most states, it’s legally required the moment you hire your first employee. An employee falling off a ladder is the classic example — workers’ comp picks up the medical costs and a portion of their lost income while they recover.
Commercial property insurance protects your tools, equipment, and other business property. A fire at your storage unit or a theft from your work truck — commercial property covers the loss.
Commercial auto insurance covers accidents involving vehicles used for business. If your employee is driving the company truck and rear-ends someone, your business is on the hook — commercial auto is what pays for it.
Beyond those four, there are some additional coverages worth knowing about:
- Contractor’s errors & omissions (E&O): Covers the cost of repairing or redoing defective work — useful if your business also provides design or consulting services
- Builder’s risk insurance: Covers labor and materials in a partially completed project if something goes wrong mid-build
- Umbrella insurance: Extra liability coverage on top of your existing policies, useful if you’re doing large commercial jobs where judgments could be substantial
- Surety bonds: Not technically insurance, but often required by clients — a bond guarantees you’ll complete the job as promised
- Professional liability insurance: If your contracting work involves any design or engineering advice, this is worth looking into
Key factors that affect your contractors insurance costs
Understanding what drives your premium up or down helps you make smarter decisions when shopping for coverage.
Type of work
This is the biggest factor. Roofing and electrical work are considered high-risk because the potential for serious injuries (falls, electrical burns, fires) is much higher than, say, interior painting. Insurers price that risk directly into your premium. As a rough comparison, a roofer might pay 2–3x what a tile installer pays for the same liability limits.
Business Size
The size of your business, including the number of employees and the value of your equipment, can also impact your insurance costs. Larger businesses with more employees and expensive equipment will generally pay higher premiums.
Number of employees and payroll
The more people working for you, the more exposure you have — more chances for injuries, more vehicles on the road, more job sites running at once. Workers’ comp premiums in particular are calculated as a percentage of your payroll.
Annual revenue and job size
Bigger revenue typically means more premium. An insurer looks at your revenue as a proxy for how much work — and therefore how much risk — your business is generating each year.
Location
State laws vary significantly. Some states have more plaintiff-friendly legal environments, higher minimum coverage requirements, or more natural disaster exposure. All of that affects what insurers charge.
How To Get Contractors Insurance Quotes
You can get contractors insurance quotes by visiting SimplyInsurance.com, where a comparison tool lets you customize coverage amounts and deductibles across multiple providers.
Getting a quote for contractors insurance is a straightforward process. You can start by visiting SimplyInsurance.com, where you can Compare Small Business Insurance Quotes Online from multiple providers. The website’s quote comparison tool allows you to customize your inputs, such as coverage amount and deductibles, to get the most accurate quotes.
Claims history
If your business has a history of claims, you’re going to pay more. Insurers look at your loss runs (a record of past claims) when setting your rate. A clean record over 3–5 years can meaningfully lower your premium.
Coverage limits and deductible
Higher limits = higher premium. Higher deductible = lower premium. Most contractors carry $1 million per occurrence / $2 million aggregate on general liability — that’s a standard level that most clients and general contractors will require. On deductibles, a range of $500 to $1,000 is typical.
Contractors Insurance Cost Calculator
Using a cost calculator can help you estimate your contractors insurance premiums more accurately. SimplyInsurance.com offers a user-friendly calculator that takes into account various factors like business size, type of work, and location to provide a personalized estimate.
Contractors Insurance Cost Vs General Liability Insurance
It’s essential to understand the differences between contractors insurance and general liability insurance. While both types of insurance provide valuable coverage, contractors insurance is more comprehensive and typically more expensive.
Is General Liability Insurance the same as Contractors Insurance
No, general liability insurance is not the same as contractors insurance. General liability insurance covers third-party injuries and property damage, while contractors insurance includes additional coverage for tools, equipment, and completed operations.
What Does Contractors Insurance Cover In U.S
Contractors insurance in the U.S. covers a wide range of risks, including property damage, bodily injury, and completed operations. It also provides coverage for tools and equipment, which is essential for contractors who rely on their gear to complete jobs.
What Is A Good Deductible For Contractors Insurance
A good deductible for contractors insurance typically ranges from $500 to $1,000. Choosing a higher deductible can lower your premiums, but it also means you’ll pay more out-of-pocket in the event of a claim.
What insurance do contractors need
Contractors generally need several types of insurance, including general liability, workers’ compensation, and commercial auto insurance. Depending on the nature of your work, you might also need additional coverage like builder’s risk insurance or professional liability insurance.
How Much Coverage Do I Need As A Contractor
The amount of coverage you need as a contractor depends on several factors, including the size of your business, the type of work you do, and the specific risks you face. A good rule of thumb is to have enough coverage to protect your assets and cover potential liabilities.
Are There Penalties for Not Having Contractors Insurance
Yes, there can be penalties for not having contractors insurance, including fines and the potential loss of your business license. Additionally, operating without insurance puts your business at significant financial risk.
Types of Contractors Insurance
There are several types of contractors insurance, each designed to cover different aspects of your business. These include general liability, workers’ compensation, commercial auto, and builder’s risk insurance.
Does contractors insurance cover subcontractors
Contractors insurance can cover subcontractors, but it depends on the specific policy. It’s essential to read your policy details and consult with your insurance provider to ensure subcontractors are covered.
Why contractors insurance matters beyond just the legal requirement
Here’s the practical reality: most commercial clients and general contractors will ask for proof of insurance before they’ll hire you. If you’re bidding on jobs and you can’t produce a certificate of insurance, you’re out of the running before the conversation even starts.
There’s also the subcontractor angle. If you work under a general contractor, many GCs require subcontractors to carry their own liability insurance. In some states, a general contractor can actually be held financially responsible for damages caused by an uninsured sub — so GCs are incentivized to check.
And then there’s the worst-case scenario: a single lawsuit without insurance could mean selling off your equipment, draining your savings, or closing the business entirely. Industry research consistently shows that one of the leading reasons small contracting businesses close isn’t slow work — it’s an uninsured loss they couldn’t absorb.
Common exclusions to know about
Every policy has things it won’t cover. The most common exclusions in contractors insurance include:
- Intentional acts — if you damage something on purpose, no coverage
- Faulty workmanship — general liability typically won’t pay to redo your own bad work (that’s what E&O is for)
- Employee injuries — GL doesn’t cover your own workers; that’s workers’ comp territory
- Auto accidents — if it happens in a vehicle, you need commercial auto, not GL
- Professional advice — if you’re providing design or consulting services and something goes wrong, standard GL may not cover it
Reading the exclusions before you buy is worth 15 minutes of your time. Surprises at claim time are the worst kind.
How to lower your contractors insurance premiums
A few practical ways to bring costs down without gutting your coverage:
- Bundle policies — buying GL, commercial auto, and property from the same insurer usually gets you a discount
- Raise your deductible — going from a $500 to a $1,000 deductible can meaningfully reduce your annual premium
- Implement a safety program — documented safety training and protocols can qualify you for credits with some insurers
- Keep your claims history clean — avoid filing small claims you can absorb out of pocket; frequent claims push rates up at renewal
- Pay annually — many insurers charge installment fees if you pay monthly; paying upfront can save a few percent
Contractors Insurance Vs Workers Compensation Insurance
While both contractors insurance and workers’ compensation insurance are essential for contractors, they serve different purposes. Contractors insurance covers property damage and liability, while workers’ compensation covers employee injuries and illnesses.
Taking Action
Now that you have a comprehensive understanding of contractors insurance costs and coverage, it’s time to take action. Visit SimplyInsurance.com to compare quotes and find the best policy for your needs. Protect your business and ensure peace of mind by getting the right coverage today.
Frequently Asked Questions
Which is better, term or whole life insurance?
Term life insurance is generally better for most people because it has lower premiums and is easier to understand. It provides a specific death benefit for a set term length at a fixed price.
How do I get a life insurance policy?
The best way to get a life insurance policy is by shopping online. The process has become much easier in recent years, allowing you to compare quotes and apply for coverage quickly.
What happens to term life insurance if you don’t die?
If you don’t die before your term policy ends, you can either renew the policy at a higher rate, convert it into a whole life policy, or let it expire.
How much is term life insurance for a 50-year-old?
The cost of term life insurance for a 50-year-old depends on several factors. For example, a $250,000 20-year term policy for a woman in excellent health with no exam would cost around $26.42 per month.
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About the author
Sa El
Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 16 years of experience in the industry. He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.
How to get a contractors insurance quote
Getting quotes is easier than most people think. You’ll want to have the following info handy:
- Your trade and a brief description of the work you do
- Number of employees and annual payroll
- Estimated annual revenue
- Any prior claims in the last 3–5 years
- What coverage limits you need (check your client contracts — they often specify)
You can compare quotes and get covered quickly through the tools at SimplyInsurance.com.
Is contractors insurance required by law?
Workers’ comp is required in nearly every state once you have employees, and many states require general liability just to get a contractor’s license.
It depends on the state and the type of work. Workers’ compensation is legally required in almost every state as soon as you have employees. General liability is required for licensing in many states and trades — California and Florida both require it for licensed contractors, for example. Even where it’s not strictly required, you’ll effectively be required to have it if you want to work for commercial clients or general contractors.
Operating without required coverage can result in fines, license suspension, or in the case of workers’ comp in some states, criminal charges.
Frequently asked questions
Is general liability insurance the same as contractors insurance?
Not exactly. General liability is one component of contractors insurance. Contractors insurance is a broader term that usually refers to a package including GL plus workers’ comp, commercial auto, and/or tools coverage depending on your business.
Does contractors insurance cover subcontractors?
It can, but not automatically. Most policies have specific language about subcontractors — some require subs to carry their own insurance, others extend the contractor’s coverage. Read your policy carefully and talk to your agent if you regularly use subs.
How much coverage do I need?
The minimum most clients will accept is $1 million per occurrence / $2 million aggregate for general liability. If you’re doing larger commercial work, you may need higher limits or an umbrella policy on top. Your workers’ comp requirements depend on your state and payroll.
What’s a good deductible for contractors insurance?
Somewhere between $500 and $1,000 is the sweet spot for most contractors. Higher deductibles lower your premium but mean more out-of-pocket when a claim happens — find a number you could actually pay without stress.
Can I get contractors insurance with a bad claims history?
Yes, but it’ll cost more. Some standard market insurers will decline businesses with multiple recent claims, but non-standard or surplus lines markets can usually find coverage. Expect higher premiums until your claims record cleans up.
Disclosure
Simply Insurance may receive compensation when readers click partner links and an eligible quote is requested. Our editorial team picks providers based on coverage fit and reader fit, not payout.