Home > General Contractors Insurance Guide > General Contractors

This page is part of the broader General Contractors Insurance Guide, which provides essential information for contractors seeking comprehensive coverage options. Consider general liability insurance, which is a core coverage designed to protect contractors from third-party claims involving bodily injury, property damage, and personal injury. Contractors should also consider workers' compensation for employee safety and commercial auto insurance for vehicle-related risks. Understanding general liability coverage is crucial for effective risk management in contracting businesses, where compliance with contractual requirements and safeguarding against potential claims are fundamental aspects of operations.

You're a general contractor. You spend long days on the job site, managing your crew, keeping them on schedule, and ordering the materials you need to complete the project. You have more than enough to worry about when you work. You don't have the time to think about insurance, and even if you did, you're convinced it's not worth the hassle. After all, you have workers' compensation insurance, which should be sufficient, right? Wrong!

General contractors like you need to protect themselves from risk. You work in dangerous environments, with more than a few hazards to concern yourself with. Construction isn't for the faint of heart, and dangers can be found around every corner. You have to watch out for heavy machinery, bulky building materials, and falling debris. No one is completely safe during a construction project. You never know when disaster could strike, so don't take any chances, get the right amount of insurance for contractors ASAP.

Get Insurance, It's the Law!

In addition to being a wise investment, in most states, contractors are required by law to carry insurance. In some areas of the country, these requirements are relatively easy to satisfy, while in others, general contractors must carry multiple lines of insurance. Before you start a career as a general contractor, make sure you have the proper insurance and that you have a plan in place that will ensure you're in compliance with all of the local laws. If you don't, you could be fined or banned from operating in that state. Insurance isn't just a good idea, it's the law.

For a more comprehensive look at what policies you may need, visit our detailed guide on Insurance for General Contractors.

Types of Insurance

In most states, general contractors must at the very least be able to show that they're covered by workers' compensation insurance. In New York, you must have workers' compensation, general liability, and disability insurance to operate legally within the state. You may also be required to purchase additional insurance if you're working on a project with a crane and other heavy machinery, or if you plan to build a structure that will be several stories tall. In New York and elsewhere, the insurance you need depends on the type of work you plan to complete and the area of the state and country in which you're located. Regardless of the requirements, it's smart to insure yourself against as much risk as possible. Here are a few of the policies you should consider if you're a general contractor:

General Liability

These policies vary, but they typically cover claims that involve bodily injury, personal injury, and property damage. This isn't intended for your employee's injuries, those will be taken care of by your workers' compensation insurance. General liability protects you against injuries or property damage that your work or your employees caused to another person and/or his/her property. Most states require general contractors to have this to legally work, but even if your state doesn't, it's wise to do so. You don't want to get caught with a multi-million dollar claim without the proper coverage.

For guidance on how these policies support your business, read more about the Importance of Construction Trade Contractors General Liability Insurance.

Commercial Auto Insurance

If you're the boss and you own a business, you may have company vehicles. Make sure these are insured, especially if you park them on or near the work site. You can't predict accidents, and you don't want to have to replace your truck if one of your employees drops a steel beam on the hood.

Workers Compensation Insurance

Like general liability insurance, your state will most likely mandate that you have workers' compensation insurance. You may be exempt from carrying it if you satisfy an exception or if you work alone and only hire subcontractors who are not your employees. If you own a business and have employees under you, you most likely will need this.

Umbrella and Excess Liability Insurance

Construction accidents can be catastrophic. If one of your employees destroys an expensive piece of equipment, or if a third party is critically injured by your work, your base general liability insurance policy may not cover all of the losses. Excess insurance will give you the peace of mind of knowing that you're covered in even the most extreme situations.

Key Coverages

• General Liability Insurance — Covers claims related to bodily injury and property damage caused by your work.
• Workers' Compensation Insurance — Provides coverage for employee injuries and illnesses sustained while on the job.
• Commercial Auto Insurance — Insures company vehicles, protecting against incidents that may occur on job sites.
• Disability Insurance — Offers income protection if you are unable to work due to a disability.
• Umbrella Insurance — Provides additional coverage beyond standard limits, for maximum protection.

Special Coverages

• Excess Liability Insurance — Covers significant claims that exceed your standard liability policy limits.
• Professional Liability Insurance — Protects against claims of negligence or errors in professional services.
• Builder's Risk Insurance — Covers buildings under construction against damages due to various risks.
• Pollution Liability Insurance — Covers claims related to pollution incidents arising from construction activities.

Related Coverages

• Construction Contractors Liability Insurance
• General Contractors General Liability Insurance
• Subcontractors General Liability
• Contractors and Construction Trades Insurance
• Multi-Purpose / General Contracting Insurance

Frequently Asked Questions

What type of insurance is mandatory for general contractors?

Most states require general contractors to carry workers' compensation and general liability insurance. Some states may also mandate additional coverage such as disability or commercial auto insurance depending on the scope of work.

Do I need insurance if I only work with subcontractors?

Yes, even if you hire subcontractors, you may still be held liable for job-site accidents or property damage. Many clients also require proof of insurance before awarding contracts.

What is the difference between general liability and professional liability insurance?

General liability covers bodily injury and property damage claims, while professional liability (errors and omissions) covers mistakes in your work, such as design flaws or installation errors.

Can I bundle multiple coverages into one policy?

Yes, some insurers offer Business Owners Policies (BOPs) that combine key coverages such as general liability, property, and workers' compensation into one package, depending on eligibility.

How do I show proof of insurance to clients or regulatory agencies?

You can request a Certificate of Insurance (COI) from your insurance provider. This document summarizes your coverage and serves as official proof for clients or licensing boards.

Still have questions? Talk to a local insurance expert.