General liability insurance for contractors could help protect your business from some of the more common business risks of working on other people’s property. For electrical contractors, insulation contractors, metal erection contractors, roofing contractors and others in the construction industry and skilled trades, general contractors liability insurance may help shield your business from the costs of some unexpected accidents.
Jump ahead to learn:
- Is contractor’s General Liability insurance required for a contractor license?
- How could contractor General Liability insurance coverage help protect your business?
- How much does general contractor liability insurance cost?
- What other types of business insurance could benefit contractors?
- How ERGO NEXT General Liability insurance for contractors can help protect your business
Is contractor’s General Liability insurance required?
For some contractors and for some jobs, general liability insurance can be mandatory.
You may have to show proof of general liability insurance coverage (also called a certificate of insurance, or COI) to:
- Get your professional license
- Renew your professional license
- Pull a permit for a job
- Bid on some job
- Sign client contracts
- Work as a subcontractor
- Lease a workspace, office or commercial property
Clients or general contractors may also ask to be listed as an additional insured on your policy before work begins.
Business liability insurance requirements vary by state, city and trade. Check with your local licensing board or regulatory agency to understand what applies to your business.
How could contractor General Liability insurance coverage help protect your business?
Whether you work alone or manage a small crew, general liability insurance for general contractors could help protect you while working on job sites and in clients’ spaces.
Even if it’s not a legal requirement, general liability insurance coverage for contractors may help cover:
- Medical bills for bodily injuries to non-employees who get hurt at your job site, including your clients or the public
- Property damage your or your employees accidentally cause to a client’s home, building or belongings
- Accusations of libel, slander or defamation, including claims tied to your advertising
- Advertising injury, such as copyright infringement or improper image use in your ads
- Legal fees and defense costs related to covered claims if you need to defend yourself
1. Medical bills for bodily injuries to non-employees
Imagine a passerby on the street trips over your work equipment and suffers an injury as a result.** Commercial contractor general liability insurance could help pay for the injured person’s medical expenses up to your policy limits.
Note that general liability coverage doesn’t apply if you or your employees suffer a work-related injury or illness. For that type of coverage, workers’ compensation insurance, which is required in most states if you have employees, could help cover those costs.
2. Property damage you cause to someone else’s property
If you or your employee track wet cement onto a client’s rug or accidentally damage electrical wiring while working, your general liability insurance policy could help cover the costs of damages.
3. Accusations of libel, slander or defamation
Here’s an example: Your social media claims a competitor offers substandard services and the business owner sues you for damages. General liability could help pay your legal costs to settle the claim.
4. Advertising injury
You renovate a client’s house and post pictures on your website as an example of your work – but you didn’t get the client’s permission. They see the photos and take legal action against you for invasion of privacy. General liability could help to settle the claim against you, including legal fees, court fees, judgements and settlements.
5. Legal fees and defense costs
Your client alleges you damaged their floor while installing a new appliance and takes you to court. General liability could help to pay for your legal fees.
How much does general contractor liability insurance cost?
General liability insurance costs for contractors (also called your insurance premium) can vary depending on several factors, including:
- The type of work you do (electrician, plumber, handyman, HVAC technician, etc.)
- The size of your business and your number of employees
- Your annual revenue
- The coverage options you choose
- Your policy limits and deductible
- Where your business operates
- How long you’ve been working as a contractor
- Your claims history
To see exactly what a general liability policy will cost for your contractor business, start a free, no-obligation quote with ERGO NEXT.
What other types of business insurance could benefit contractors?
General liability coverage does a lot to help protect your contracting business, but it doesn’t cover every business risk. Many contractors seek additional protection from multiple business insurance policies, including:
Contractors’ Errors and Omissions insurance (Contractors’ E&O)
Contractors’ E&O insurance could help cover claims against you for oversights and mistakes in the work that you do.
This type of business insurance for contractors could help protect you from the cost of workmanship errors, legal defense and legal judgments that result from your professional mistakes – sometimes after the job is finished.
For example, if you’re accused of installing cabinets incorrectly for a client, contractors’ E&O could help cover expenses to fix the problem or defend your business if a client takes legal action against you.
Learn more about contractors’ E&O.
Workers’ Compensation insurance for contractors
Most states require workers’ compensation if you have employees. It can help cover medical expenses and lost wages after an employee’s workplace accident.
Learn more about workers’ comp insurance.
Tool and Equipment insurance
For contractors, tools and equipment insurance could help cover costs if your work gear gets stolen or damaged on the job. You can get protection from some financial losses if the job site tool storage shed or trailer gets broken into, or if your contractor accidentally breaks the tools you need to finish the job.
