How Much Does General Liability Insurance Cost for Contractors?

General liability insurance is one of the most important policies a contractor can purchase. It can help protect the business when a customer is injured, a technician damages someone’s property, or completed work leads to a covered claim.

The price varies significantly by trade. A landscaper or electrician may pay much less than a roofer because the likelihood and potential severity of claims are different. Revenue, subcontractor expenses, location, policy limits, claims history, and the exact services performed can also change the premium.

Across construction and contracting businesses, general liability insurance currently averages approximately $89 per month, or $1,069 per year, among customers purchasing policies through Insureon. However, contractor-specific premiums can range from less than $50 per month to several hundred dollars per month.

Average General Liability Insurance Cost for Contractors

The following figures provide general pricing benchmarks for different contracting professions:

Contractor Profession	Average Monthly Cost	Approximate Annual Cost
Construction and contracting businesses overall	$89	$1,069
Landscaping contractors	$51	$610
Electricians	$57–$61	$684–$732
HVAC installation contractors	$78	$941
Plumbers	$115	$1,378
General contractors	$142–$162	$1,700–$1,944
Roofing contractors	$267–$317	$3,200–$3,804

The construction-wide figures were updated in July 2026 and are based on policies purchased by more than 40,000 small construction businesses. The trade-specific figures come from current or recently updated pricing pages and should be viewed as estimates rather than guaranteed quotes.

The same construction data indicates that approximately 39% of Insureon customers pay less than $75 per month, while 76% pay less than $150 per month for general liability coverage. Higher-risk contractors, especially roofers, may pay substantially more.

These averages usually reflect small businesses. A contractor with several crews, millions of dollars in annual revenue, extensive subcontractor use, or a history of large claims may receive a much higher quote.

What Does Contractor General Liability Insurance Cover?

General liability insurance protects contractors against certain claims made by customers, property owners, vendors, visitors, and other third parties.

The policy may cover:

• Third-party bodily injury
• Accidental damage to customer property
• Medical expenses related to covered injuries
• Personal and advertising injury
• Legal defense expenses
• Settlements and court judgments
• Certain claims arising from completed work

The Small Business Administration describes general liability insurance as coverage for financial losses involving bodily injury, property damage, medical expenses, lawsuits, settlements, and judgments. The NAIC also notes that general liability may cover legal fees when a business is sued over a covered liability claim.

Examples of Contractor Liability Claims

A general liability policy may respond when:

• A homeowner trips over a contractor’s extension cord.
• A plumber accidentally causes water damage.
• An electrician damages appliances while performing wiring work.
• A painter spills paint on hardwood flooring.
• A roofer drops a tool onto a customer’s vehicle.
• A landscaper’s mower throws a rock through a window.
• A subcontractor’s work causes covered property damage.
• Completed work later results in bodily injury or property damage.

Coverage depends on the policy language, endorsements, exclusions, and circumstances surrounding the claim.

What Does General Liability Insurance Not Cover?

General liability is broad, but it does not replace every form of contractor insurance.

It generally does not cover:

• Employee workplace injuries
• Accidents involving business vehicles
• Theft or damage to the contractor’s tools
• Intentional damage
• Professional design or consulting errors
• Most pollution and contamination claims
• The contractor’s own property
• The cost of simply redoing defective work

Workers’ compensation addresses employee injuries, while commercial auto insurance covers business vehicle accidents. Tools and equipment coverage protects portable property, and professional liability may be necessary when the contractor provides designs, inspections, calculations, or consulting.

Standard liability and property policies also exclude many pollution-related losses, making contractors pollution liability important for businesses dealing with chemicals, fuel, mold, asbestos, contaminated soil, refrigerants, or wastewater.

Faulty Workmanship vs. Resulting Damage

General liability insurance usually does not pay solely because the contractor’s work was incorrect and must be repaired.

For example, the cost of reinstalling a defective plumbing connection may remain the contractor’s responsibility. However, damage to walls, cabinets, and flooring caused by water escaping from that connection may qualify as resulting property damage.

Contractors should confirm that their policy includes products-completed operations coverage, which addresses certain claims arising after a project is completed.

What Factors Affect General Liability Insurance Costs?

Insurance providers evaluate the probability that the contractor will face a claim and how expensive that claim could become.

Type of Contracting Work

The contractor’s trade is one of the most important pricing factors.

Roofing, structural construction, excavation, demolition, and other high-risk operations generally cost more to insure than lower-risk services. Insurers may also charge more for work involving heights, open roofs, underground utilities, gas lines, heavy machinery, or occupied commercial buildings.

A contractor should disclose every service performed. Undisclosed work may be excluded or create problems when a claim is filed.

Annual Revenue

Higher revenue usually means the business completes more projects and interacts with more customers. This creates more opportunities for injuries, property damage, and completed-work claims.

A contractor earning $100,000 annually will generally pay less than a company earning several million dollars, assuming the businesses otherwise perform similar work.

Payroll and Number of Employees

Although payroll has a stronger direct effect on workers’ compensation, it can also influence general liability pricing because a larger workforce performs more work and creates greater exposure.

Insurers may ask for the number of owners, employees, temporary workers, and subcontractors.

Subcontractor Costs

General contractors and remodeling companies may pay higher premiums when they subcontract a large percentage of their work.

The insurer may request:

• Subcontractor payment records
• Certificates of insurance
• Written agreements
• Additional insured endorsements
• Proof of workers’ compensation
• Descriptions of subcontracted services

Payments to uninsured subcontractors may be included in the contractor’s exposure during the premium audit.

Claims History

A clean claims history can help a contractor qualify for better pricing. Previous water damage, construction defect claims, customer injuries, or lawsuits may increase premiums.

Insurers typically examine the frequency, type, and severity of past losses rather than looking only at the total number of claims.

Business Location

Insurance costs differ by state and local market because legal environments, claim costs, regulations, labor expenses, and construction activity vary.

A contractor working across state lines should inform the insurer before beginning operations in a new jurisdiction.

Coverage Limits

Higher limits provide greater protection but usually cost more.

A common contractor policy includes:

• $1 million per occurrence
• $2 million general aggregate
• $1 million products-completed operations aggregate

Construction businesses purchasing through Insureon commonly select $1 million per occurrence and $2 million aggregate limits.

The per-occurrence limit is the maximum available for a single covered incident. The aggregate is the maximum generally available for covered claims during the policy period.

Deductible

A higher deductible may reduce the premium, but it increases the contractor’s out-of-pocket responsibility after a claim.

Construction businesses in Insureon’s current dataset commonly carry a $500 general liability deductible, although trade-specific policies may have higher or lower amounts.

Additional Insured Requirements

General contractors, commercial customers, landlords, and property managers frequently require additional insured status.

The cost may increase when a contract also requires:

• Primary and noncontributory wording
• Waiver of subrogation
• Ongoing and completed operations endorsements
• Project-specific aggregate limits
• Higher liability limits
• Customized certificates of insurance

The contractor should send insurance requirements to an agent before signing the contract.

Is General Liability Insurance Legally Required?

There is no single federal rule requiring every contractor in the United States to carry general liability insurance. Requirements depend on the contractor’s state, trade, license, legal structure, and customer contracts.

For example, Oregon requires licensed contractors to maintain public liability and property damage insurance. A residential general contractor generally needs $500,000 in liability coverage, while commercial general contractors may need a $1 million or $2 million aggregate limit depending on their endorsement level.

Texas electrical contractors must maintain at least $300,000 per occurrence, $600,000 aggregate, and $300,000 in products-completed operations aggregate coverage.

California contractor LLCs must carry at least $1 million in liability insurance when five or fewer people are listed as personnel of record. The required amount increases by $100,000 for each additional person, up to $5 million.

Even when state law does not require general liability insurance, a contractor may need it to:

• Obtain or maintain a license
• Rent commercial property
• Work as a subcontractor
• Sign a construction contract
• Bid on public or commercial projects
• Work for a property manager
• Provide a certificate of insurance
• Meet a customer’s risk-management requirements

Contractors should verify requirements with their state licensing agency and local authorities.

General Liability vs. a Business Owner’s Policy

A business owner’s policy, or BOP, combines general liability insurance with commercial property and business income coverage.

A BOP may be suitable for a contractor who owns:

• Office equipment
• Shop tools
• Inventory
• Replacement parts
• Furniture
• Computers
• Property stored at a fixed location

General liability alone does not protect the contractor’s own property. A BOP can provide broader protection and may cost less than purchasing liability and property policies separately.

Not every contractor qualifies for a BOP. Roofing, heavy construction, excavation, or other high-risk businesses may need individually underwritten policies.

How Contractors Can Lower General Liability Costs

Contractors may reduce their premiums by:

• Comparing equivalent quotes from multiple insurers
• Maintaining a clean claims history
• Using written safety and quality-control procedures
• Accurately reporting revenue and subcontractor costs
• Collecting insurance certificates from subcontractors
• Selecting limits that match actual contract requirements
• Bundling liability and property coverage when eligible
• Increasing the deductible when financially practical
• Removing discontinued services from the policy
• Avoiding coverage gaps and late cancellations
• Paying the annual premium upfront when a discount is available

Contractors should compare exclusions as carefully as prices. A cheaper policy may exclude roofing, excavation, subcontracted work, water damage, residential construction, or completed operations.

Frequently Asked Questions

How Much Is Contractor General Liability Insurance Per Month?

Construction and contracting businesses currently pay an average of approximately $89 per month through Insureon. Trade-specific costs may range from around $51 per month for landscaping businesses to more than $267 per month for roofers.

Can a Self-Employed Contractor Get General Liability Insurance?

Yes. Sole proprietors, independent contractors, LLCs, and incorporated businesses can purchase general liability insurance. A solo contractor will often pay less than a company with employees, multiple locations, and substantial subcontractor expenses.

Is $1 Million in Coverage Enough?

A $1 million per-occurrence and $2 million aggregate policy is common for contractors, but it may not be sufficient for every project. Large commercial contracts may require higher primary limits or commercial umbrella insurance.

Does General Liability Cover Subcontractors?

Coverage varies. A policy may cover certain liability arising from subcontracted work, but it may also contain subcontractor conditions or exclusions. Contractors should require subcontractors to maintain their own insurance.

Will General Liability Cover My Tools?

No. General liability protects against third-party claims, not damage to the contractor’s own tools. Tools and equipment insurance or inland marine coverage is generally needed.

Can I Get a Certificate of Insurance Immediately?

Many insurers can issue a certificate shortly after coverage begins. The certificate confirms existing insurance but does not change policy terms, create new coverage, or automatically satisfy every contractual endorsement requirement.

Conclusion

General liability insurance for contractors averages approximately $89 per month, but actual premiums vary widely by trade. Landscapers and electricians may pay closer to $50 or $60 per month, while general contractors and roofers can pay well over $100 or $200 per month.

The contractor’s services, revenue, subcontractor costs, claims history, location, coverage limits, and contract requirements all influence the final price.

Before choosing a policy, compare more than the monthly premium. Review the exclusions, completed operations coverage, subcontractor conditions, deductibles, and endorsements. A policy that accurately covers the contractor’s real operations provides far greater value than inexpensive insurance that excludes the company’s most important risks.

Editorial review: This guide was researched and reviewed by the Coverage Editorial Team using government agencies, insurance regulators, licensing authorities, policy documentation, and current industry pricing sources.