Insurance For Contractors

Contractors and construction companies should carry general liability insurance because it serves as essential protection against common jobsite risks. Whether it’s accidental property damage, an injured visitor, or claims of negligence, general liability helps cover repair costs, medical expenses, and legal defense. This coverage is often required by project owners, general contractors, and building managers before work begins, proving your professionalism and making sure you stay competitive when bidding on jobs.

Insurance costs for contractors and construction firms aren’t fixed; they vary based on factors like company size, trade type, location, claims history, and coverage limits. Instead of one flat rate, here’s what a typical policy often includes: general liability (for injuries or property damage), workers’ compensation (required for employees), commercial auto (for company vehicles), and tools & equipment/inland marine coverage (for gear on-site or in transit). Optional protections such as professional liability (E&O), business interruption, and umbrella insurance can also be added to fit specific business needs.

Hired non-owned auto liability (HNOA) protects your business if an accident causes injury or property damage while using a vehicle your company doesn’t own — such as a rental car or an employee’s personal vehicle for work. For example, if a crew member drives their own truck to pick up materials and causes a crash, HNOA can cover liability when the personal auto policy excludes or falls short for business use. This coverage is typically secondary to the driver’s policy and is essential for contractors who frequently rely on non-company vehicles.

General liability insurance for contractors and construction firms typically includes:

• Bodily Injury: e.g., if a visitor or third party is injured on the jobsite.

• Property Damage: e.g., accidentally damaging a client’s property.

• Completed Operations: if issues arise after work is finished, such as faulty workmanship causing damage.

• Legal Defense & Settlements: covering attorney fees, court costs, and settlements.

• Advertising Injury: such as claims of defamation or copyright infringement in your marketing.

Project owners, general contractors, and property managers often require proof of this coverage before awarding jobs. It demonstrates professionalism, protects all parties from risk, and ensures you can win contracts without unnecessary liability exposure.

Yes, when hiring subcontractors, it’s critical to confirm they carry their own general liability and workers’ compensation insurance. Even better, require them to list your company as an “additional insured” on their policy. This protects your business if they cause injury or property damage on a project you manage. Many project owners and general contractors also require subcontractors to be fully insured, ensuring compliance and shielding you from costly financial or legal fallout tied to their work.

Contractors and construction companies typically rely on inland marine (also called tools & equipment) coverage to safeguard valuable gear during transit or while stored at job sites. This coverage helps pay for repair or replacement if equipment is lost, stolen, or damaged on the road or overnight. High-value or specialized machinery may also require equipment floaters or endorsements for broader protection. Having this coverage minimizes downtime and financial setbacks when gear-related incidents occur.