Construction is the most insurance-intensive industry in the economy. Every project involves bodily injury risk, property damage, expensive equipment, multiple subcontractors, vehicle fleets, contractual requirements, and regulatory compliance.
A single workplace accident can generate claims in the millions. A missing certificate of insurance can lose you a bid. Here's the complete insurance program for general contractors.
General Liability
General liability for construction covers three critical areas:
- Premises/operations: Injuries and damage during active construction
- Products-completed operations: Claims arising after the project is finished
- Personal/advertising injury: Libel, slander, and similar claims
Completed operations is the most important section for contractors. If a building you constructed develops a structural issue years later, this is the coverage that responds. Never accept a policy that limits or excludes completed operations.
Limits: $1M/$2M minimum for small residential. $2M/$4M or higher for commercial projects. Government contracts often require even higher limits.
Workers Compensation
Construction workers comp carries some of the highest rates in any industry. OSHA's "Fatal Four" — falls, struck-by, electrocution, and caught-between — account for most construction fatalities:
- Falls: #1 cause of construction fatalities. Roofing, scaffolding, ladders.
- Struck-by: Falling objects, equipment, vehicles on site
- Electrocution: Contact with power lines, exposed wiring
- Caught-between: Workers caught in or between equipment, materials, or structures
EMR is critical: Your experience modification rate directly affects your workers comp premium AND your ability to win bids. Many project owners require an EMR below 1.0 to qualify.
Builder's Risk
Covers the structure under construction plus materials:
- Building structure during construction
- Materials and supplies on site
- Materials in transit to the site
- Temporary structures (scaffolding, forms)
- Soft costs (architect fees, permits) if the project is delayed by a covered event
Builder's risk policies are project-specific — coverage starts at groundbreaking and ends at substantial completion or occupancy.
Commercial Auto
Construction fleets include heavy vehicles with high liability exposure:
- Pickup trucks, dump trucks, flatbeds
- Heavy equipment transported on public roads
- Hired and non-owned auto for employees using personal vehicles
- Trailer coverage for equipment transport
Inland Marine / Equipment
Construction equipment moves constantly between sites:
- Excavators, loaders, skid steers, cranes
- Generators, compressors, power tools
- Scaffolding and formwork
- Rented and leased equipment (verify your coverage vs. the rental company's)
Surety Bonds
Essential for commercial and government construction:
- Bid bond: Guarantees you'll honor your bid price
- Performance bond: Guarantees project completion per contract
- Payment bond: Guarantees payment to subcontractors and suppliers
- Bonding capacity: Your maximum bonding limit depends on your financial strength, track record, and working capital
Subcontractor Management
As a GC, you're exposed to your subcontractors' risks. Protect yourself:
- Verify insurance: Get COIs from every sub before they start work
- Additional insured: Require subs to name you as additional insured on their GL
- Waiver of subrogation: Prevents the sub's carrier from suing you after paying a claim
- Workers comp verification: If an uninsured sub's worker is injured, YOUR workers comp may have to cover it
- Hold harmless agreements: Contractual risk transfer for sub-related claims
How to Control Construction Insurance Costs
- Safety program: Written safety plans, toolbox talks, OSHA compliance directly reduce EMR and workers comp
- Subcontractor compliance: Verify every sub's insurance — uninsured subs create premium increases on YOUR policy
- Accurate payroll reporting: Misclassified employees create audit surprises. Report accurately throughout the year.
- Fleet management: MVR monitoring, driver training, and GPS tracking reduce auto claims
- Independent agent: Construction insurance is highly specialized — an agent with access to multiple construction-focused carriers finds the best program