When an employee gets injured on the job, it is one of the most serious situations a business can...
General Contractor Insurance
Insurance for the way general contractors operate
General contractors manage risk every day. Job site accidents, property damage, subcontractor issues, equipment losses, vehicle exposures, and contract requirements can all create financial pressure.
The right insurance program helps protect your business from common construction related losses and helps you meet the insurance requirements that often come with bids, contracts, and project work.
At Concklin Insurance Agency, we help general contractors build coverage around their operations, including job site exposures, subcontractor relationships, equipment, vehicles, and project specific requirements.
Common risks for general contractors
General contractors face a wide range of exposures that can lead to claims, delays, or contract problems. Common risks include:
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Damage to a job site or surrounding property
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Bodily injury claims involving third parties
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Worker injuries and job site accidents
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Delays that create financial pressure or contract disputes
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Defective work allegations
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Subcontractor related claims
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Theft or damage involving tools, materials, or equipment
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Auto related losses involving company vehicles or business use of personal vehicles
No single policy covers every construction related risk. Most general contractors need a combination of coverages based on the size of the business, the type of work performed, the use of subcontractors, and the requirements in their contracts.
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Key insurance coverages for general contractors
General liability insurance
General liability insurance helps protect your business against third party bodily injury and property damage claims. It can also help cover legal defense costs if a claim leads to a lawsuit. This is one of the most common coverages clients, landlords, and project owners expect a contractor to carry.
Builder's risk insurance
Builder's risk insurance helps protect a construction project while work is in progress. Depending on the policy, it may help cover covered materials, supplies, and work in place during construction.
Workers' compensation insurance
If you have employees, workers' compensation coverage is often required and is a core part of a contractor insurance program. It helps cover medical expenses, lost wages, and related costs when an employee is injured on the job.
Commercial auto insurance
If your business owns vehicles used for work, those vehicles usually need to be insured under a commercial auto policy. If employees or owners use personal vehicles for business purposes, hired and non-owned auto exposure should also be reviewed.
Tools and equipment coverage
Contractors often depend on portable tools, machinery, and equipment that move from site to site. Inland marine or contractor equipment coverage can help protect those items if they are stolen, lost, or damaged.
Commercial property insurance
Some general contractors also need coverage for an office, warehouse, yard, stored materials, or other business property. Property exposures vary by contractor, so this part of the program should be tailored to the operation.
Professional liability insurance
Some contractors may also need professional liability coverage, especially if their work includes design responsibilities, consulting, project management services, or other professional exposures.
Additional coverages to consider
Depending on your operations, contracts, and project mix, you may also want to consider:
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Business income coverage
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Cyber liability coverage
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License and permit bonds
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Umbrella liability coverage
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Additional insured endorsements
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Waiver of subrogation endorsements
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Installation floater or broader inland marine options
The right combination depends on the work you perform, the value of your equipment and materials, the clients you serve, and the insurance requirements in your contracts.
Frequently Asked Questions
What insurance do general contractors need?
Most general contractors need a combination of policies, not just one. Common coverages include general liability, workers' compensation if you have employees, commercial auto for business vehicles, and tools or equipment coverage. Some contractors also need builder's risk, umbrella liability, or professional liability depending on the projects they take on.
How much does general contractor insurance cost?
The cost depends on the type of work you perform, your payroll, revenue, number of employees, claims history, location, vehicle exposure, subcontractor use, and the limits you need. Higher risk operations and larger projects usually mean higher premiums.
What does general liability insurance cover for contractors?
General liability insurance helps cover third party bodily injury and property damage claims. It may also help pay legal defense costs if a claim turns into a lawsuit.
Does general liability insurance cover faulty workmanship?
Usually not. General liability insurance generally does not pay to fix poor workmanship itself. If your work includes design responsibilities, consulting, project management, or other professional services, professional liability coverage may also be important. On some projects, builder’s risk may help with certain resulting physical damage, depending on the policy and the cause of loss.
Because these situations vary, contractors should review this exposure carefully with their agent.
Do general contractors need workers' compensation insurance?
If you have employees, workers' compensation is often required and is strongly recommended. It helps cover medical costs, lost wages, and rehabilitation after a job related injury.
Do subcontractors need their own insurance?
In many cases, yes. General contractors often require subcontractors to carry their own general liability coverage, and sometimes workers' compensation coverage, before starting work. Certificates of insurance are commonly used to verify that coverage is in place.
What is a certificate of insurance for contractors?
A certificate of insurance, often called a COI, is a document that shows a contractor has active insurance coverage. It typically summarizes the coverage types, effective dates, and policy limits. Clients, landlords, property managers, and project owners often ask for one before work begins.
What insurance covers contractor tools and equipment?
Tools and equipment are often insured through inland marine coverage or contractor equipment coverage. This may help protect portable equipment, power tools, and machinery while stored, transported, or used at different job sites.
See also: What is Inland Marine Insurance and Why Your Business Might Need It
Do contractors need commercial auto insurance?
If a vehicle is owned by the business and used for work, commercial auto insurance is usually needed. If a personal vehicle is used for business purposes, hired and non-owned auto exposure should also be reviewed.
See Also: Understanding the Importance of Drive Other Car Coverage
How much liability insurance should a general contractor carry?
Many contractors carry at least $1 million per occurrence and $2 million aggregate in general liability coverage because those limits are commonly required by contract. Larger jobs, public work, or commercial clients may require higher limits or umbrella coverage.
Do general contractors need builder's risk insurance on every project?
Not always. Builder's risk is usually tied to a specific project and depends on who is responsible for insuring the work in progress under the contract. In some cases the owner provides it. In others, the contractor or developer may need to arrange it.
What if I use subcontractors but do not have employees?
You may still have significant insurance needs. Subcontractor relationships can create contractual, liability, and certificate tracking issues even if you do not have direct payroll.
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The Concklin Difference
Family Owned Small Business
We understand the operating challenges small business owners face because we face them too. Concklin Insurance Agency was started by Craig Concklin and his father, Tom Concklin in 1981. We continue to be a family owned, small business to this day.
Independent Insurance Agents
We work with more than 30 insurance carriers, which gives us more flexibility to match coverage to your operation, project requirements, and budget.
Value Added Services
We offer a wide range of value added services including our Client Resource Portal and comprehensive Training and Learning Solutions Portal.
Community Involvement
We understand the importance of community. Which is why we participate in fund raisers, and donate directly to local and national nonprofits.
Client Advocacy
We help clients think through coverage decisions, certificates, claims issues, and risk management concerns before and after coverage is placed.
Referral Program
At the end of every quarter we donate $20 for each referral we receive. If you'd like to learn more about our referral program, or send us a referral - click here.
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Independent Agents act more like Trusted Advisors. We have your best interests in mind, even after coverage is bound. Like a Trusted Advisor, Independent Agents are your advocate if a claim should occur. Being in your corner means being there every step of the way, from helping you decide if a claim should be filed to talking with claims auditors and adjusters, the wellbeing of our clients is our number one priority.