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Contractors Insurance
Coverage for work-related accidents
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What is contractors insurance?
Contractors insurance is a business insurance policy designed for the construction industry. It helps protect contractors, subcontractors, and construction firms from job-related risks like accidents, property damage, and legal claims.
At Progressive Commercial, we make it easy to get insurance for contractors and subcontractors so you can build a strong foundation for your business.
Why contractors insurance is important
Contractors insurance is essential to running a successful construction business, whether you work independently or have multiple crews and job sites. Some insurance coverages, like workers' comp, are legally required for contractors, and others, like liability, are necessary to comply with building permits and client conditions.
Having the right combination of coverages for your business can protect you financially from the unexpected.
Who needs contractors insurance?
Contractors, subcontractors, and independent tradespeople should carry commercial insurance to protect their business and other partners. In fact, many employers require a contractors certificate of insurance (COI) before you can start working for them.
Common trades that need general liability insurance for contractors include:
- Construction
- Carpenter
- Plumber
- Electrician
- Landscaper
- Painter
- Handyman
- Heating and air conditioning
- Tile and flooring contractors
- General contractors
Insurance helps you stay protected, so it's worth considering even if you don't contractually need coverage.
Types of insurance for contractors
Construction companies should think about a customized commercial contractors insurance policy to prepare for different types of risks. The following are common coverages for contracting businesses:
- General liability: You'll typically need general liability insurance for contractors before you can start a job because it's often required under the terms of agreement. This coverage helps with a variety of third-party claims, like injuring someone or damaging their property.
- Commercial auto: A commercial auto policy for contractors protects vehicles used for work, including transporting tools and other contractor materials to job sites. You can opt to cover permanently attached equipment, such as ladder racks and built-in toolboxes. Individual tools and materials usually aren't covered under this policy.
- Business owners policy (BOP): A BOP combines contractors liability coverage and commercial property coverage into one easy-to-manage package. In addition to covering injury and harm to others, it protects your commercial property, including your tools and equipment. You can also add equipment breakdown coverage to protect some of your machinery.
- Workers' compensation: Workers' compensation is legally required by most states and covers employees who become sick or injured because of their job. It can pay for hospital stays, rehabilitation costs, and lost wages.
- Product liability: If a job you finished has recurring issues that cause damage, like water leaks, you could be sued for faulty work. Product liability can cover legal fees, settlement, and reimbursement costs resulting from the problem. This coverage is included in a general liability policy.
- Errors and omissions (E&O): E&O insurance can sometimes be required contractually. It protects you from claims of negligence and substandard work. E&O also includes vicarious liability, which adds protection from allegations that your workers did something wrong on the job.
How much does contractors insurance cost?
One of the biggest drivers influencing your contractors insurance cost is the type of work you do. For example, roofing contractors face different risks than HVAC technicians, so their rates will vary.
Factors that affect the cost of contractors insurance
In addition to what you do for a living, other factors that impact the cost of contractors insurance include:
- Number of employees
- Coverage limits and deductibles
- Number of vehicles
- Location
- Claims history
- Business revenue
We'll use this information to create a customized quote, so you can see exactly how much you'll pay for coverage.
Get your free contractors insurance quote today
We make it easy for you to shop for all your contractors insurance in one place. Simply start a quote online or call us to speak with a licensed agent about your commercial auto and business insurance needs.
Common questions about contractors insurance
What does contractors insurance cover?
Contractors insurance is highly customizable, so what it covers depends on what you choose. At baseline, it usually includes general liability insurance which helps with third-party claims, such as injuring someone or damaging a client's property.
Contractors can add coverage for employee injuries, business personal property, tools and equipment used at job sites through an inland marine endorsement, and more.
What does contractors insurance not cover?
It depends on your policy. General liability is the most common insurance for businesses, and it covers damage and injury you cause to others, but it won't cover damage to your work, property, tools, or employees.
It also won't cover damage or injury caused by subcontractors you hire if they don't have their own contractors insurance. You'll need to add other coverages to your policy to ensure you're protected from various circumstances.
What's the difference between a certificate holder and an additional insured?
A certificate holder is simply the business or entity that requested the policyholder's certificate of insurance. An additional insured is another person or entity that has been added to the insurance policy and is covered for certain liabilities under it.
What kind of insurance should a contractor have?
While some companies offer a one-size-fits-all contractors insurance policy, we know every business is unique. That's why our insurance experts will work with you to customize a policy just for your business, so you only pay for the coverages you need.
Are contractors required to have insurance?
While business insurance isn't always required by law, contractors may need it to meet licensing, permitting, or client requirements. Without coverage, you could be held personally liable for job-related issues. Additionally, before bidding or taking on a job, you may need proof of insurance.
Do contractors insurance requirements differ per state?
Yes, states are responsible for licensing and regulating contractors, and each state may have similar but different insurance requirements. Typically, commercial auto and workers' comp will be needed in most states.
Do I need workers' compensation insurance if I'm an independent or self-employed contractor?
In most cases, independent and self-employed contractors aren't required to carry workers' compensation insurance. However, it may be needed in certain jurisdictions or to fulfill a contract.
Learn more about workers' comp for self-employed businesses and contractors and insurance for independent contractors.
How to get contractors insurance with Progressive Commercial
Progressive Commercial makes it easy to get a contractors insurance policy. Start a quote onlineand get a customized rate in as little as eight minutes. If you need extra support, you can call and speak to one of our experts to find the right coverage for your business.
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