Question 1

What insurance does a general contractor need?

Accepted Answer

General contractors typically need: (1) General Liability — covers third-party injury and property damage, required by most licensing boards and clients; (2) Workers Compensation — required by law once you have employees; (3) Commercial Auto — if you or employees drive for work; (4) Tools & Equipment coverage — for tools and equipment damaged or stolen; and (5) an Umbrella policy for larger projects requiring higher limits.

Question 2

How much does contractor insurance cost?

Accepted Answer

Contractor insurance varies significantly by trade. A solo handyman might pay $600-$1,200/year for GL. A general contractor with 5 employees might pay $4,000-$10,000/year for GL + WC. An electrical contractor with 10 employees in California might pay $15,000-$30,000/year. The specific trades you perform, your revenue, and your claims history all drive the rate.

Question 3

Does a contractor need insurance even as a sole proprietor?

Accepted Answer

Absolutely. As a sole proprietor, you are personally liable for any claims against your business — an LLC does not exist to protect your personal assets. Additionally, most clients and property managers require proof of GL insurance (a certificate of insurance) before you set foot on their property. Without insurance, you cannot get most commercial contracts.

Question 4

What is the difference between occurrence and claims-made GL for contractors?

Accepted Answer

An occurrence policy covers claims for incidents that happened during the policy period, regardless of when the claim is filed. A claims-made policy only covers claims filed while the policy is active. For contractors whose work can result in claims years later (completed operations claims), an occurrence policy is strongly preferred.

Question 5

Can I get contractor insurance same-day?

Accepted Answer

Yes. With ERGO NEXT, you can get a quote, purchase contractor GL and WC, and download your certificate of insurance in about 10 minutes. This is particularly useful when you need to start a job today or respond to a client requirement quickly.

Best Insurance for Contractors 2026

What Coverage Does a Contractor Need?

General Liability

Workers' Compensation

Commercial Auto

Tools & Equipment

Umbrella / Excess Liability

Builders Risk

Top Contractor Insurance Carriers

ERGO NEXT (NEXT Insurance)

Pie Insurance

The Hartford

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