Contractor Insurance: Best Companies, Cost and Coverage
Contractor insurance can protect your business in case of lawsuits and other claims. It’s usually a package of policies.
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Contributing Writer Contractor insurance protects your construction business in case of lawsuits, on-the-job injuries, damage to your equipment and more. You’ll likely be required, either by law or companies hiring you, to have coverage.
Most contractors need several business insurance policies to protect against these different risks. But you can usually buy them together from the same insurance company. Here’s how to find the best contractor insurance for you.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
Best contractor insurance companies
NerdWallet’s editorial team chooses the best business insurance companies for contractors based on:
- Relative number of complaints to state insurance regulators.
- How financially strong insurance companies are, indicating their ability to pay claims.
- How easy it is to get a quote and buy a policy online.
- Whether they have policies specific to contractors.
Here are some of the top companies we found that serve contractors. It’s smart to get multiple quotes to find the best coverage at the best price.
Nationwide
If you want to customize your policy, Nationwide’s contractor insurance may be a good fit. You can set a per-project policy limit or add builder’s risk insurance, which is usually not part of commercial general liability policies. Nationwide also sells construction bonds. Read our Nationwide review.
The Hartford
If you want a business owner’s policy, check out The Hartford. Its tailored BOP for contractors includes coverage for your tools and equipment and protection against damage to property you’re installing. Read our Hartford review.
Ergo Next
Ergo Next sells custom insurance packages for everyone from drywall contractors to welders. Once you buy a policy, you can share certificates of insurance digitally with clients and contractors who request them. Read our Ergo Next Insurance review.
Thimble
Thimble is an insurance broker. Since it doesn't underwrite insurance policies, we don't give it a star rating.
If you’re the person hiring other contractors, you can use Thimble to make sure they have insurance that complies with your requirements. And if you’re the contractor who needs coverage, you can purchase a temporary or ongoing policy through Thimble. Read our Thimble review.
What is contractor insurance?
Contractor insurance is usually a package of insurance policies that protects your business from financial losses in case someone files a claim against you.
This kind of insurance is important in situations like:
- You accidentally cause damage to a customer’s home or belongings while repairing one of their appliances.
- Someone steals your materials out of your truck.
- A customer accuses you of faulty work and files a lawsuit.
- You or an employee is hurt on the job.
🤓 Nerdy Tip
Are you a contractor but don’t work in the construction industry? Check out our guide to independent contractor insurance for more information. What insurance do contractors need?
Most contractors should have general liability insurance, workers’ compensation coverage and inland marine insurance. Whether you need other types of business insurance depends on factors like:
- How big your company is.
- What’s required in your state
- What kind of work you do.
What does contractor insurance cover?
Coverage details vary by policy. Here’s a look at what common types of contractor insurance cover:
| Type of insurance | What it covers |
|---|---|
| Pays for third-party bodily injury, property damage and more. For example, if you spill paint on a customer’s one-of-a-kind rug, the customer could sue you. General liability insurance can help cover your legal and settlement costs. | |
| Covers business property and project materials during transportation or storage. If someone steals supplies from your landscaping truck while you’re stopped at a gas station, inland marine insurance will cover replacement costs. | |
| Damage or loss to buildings during construction or renovation as a result of fire, weather events, vandalism or other hazards. If the windows of a house your company is building are broken during a windstorm, builder’s risk insurance can cover the cost to replace them. | |
| Pays medical costs and more for employees who are injured or get sick while at work. Almost every state requires employers to have workers' comp for their employees, and contracts may require it for sole proprietors, too. If your employee falls off a ladder while painting a house and breaks an arm, workers’ compensation would cover their medical expenses. | |
| Covers vehicles that you use in the course of doing business and their drivers. Protects you from expenses related to accidents, such as property damage and injuries. If you’re backing up your electrician's van and collide with another driver, your commercial auto insurance will cover damage to the car and any injuries the driver receives. | |
| Business property that's damaged by certain accidents, weather events or other hazards. If a fire destroys your roofing inventory (shingles, tiles, other materials), your commercial property insurance would cover replacement costs. | |
| Claims against your business for mistakes or oversights in performing a service, breach of contract, professional negligence or failure to deliver a service on time. If a client sues your general contracting company for missing the deadline on a construction project, your professional liability policy would cover legal and settlement costs. | |
| Pays for lost income, payroll, loan payments and other expenses if your business is unable to operate due to a major disaster. Say a hurricane destroys your work vehicle and most of the tools in it. Business interruption insurance pays to keep you and your employees’ income uninterrupted until you can get back to work. |
You may want to consider a business owner's policy, which combines general liability, commercial property and business interruption coverage.
Some contracts may also require you to purchase a surety bond. Surety bonds act as promises that you’ll complete the work you were hired for. If you can’t, the bondholder — usually an insurance company — will make whoever hired you financially whole.
Save up to 30% on business insurance
NerdWallet Small Business helps you get real-time quotes from 30+ insurers, and instant access to your Certificate of Insurance (COI) through our partner, Coverdash.
How much does contractor insurance cost?
Business insurance costs can vary widely for contractors. Amounts depend on how big your business is, where you’re located and whether you’ve filed insurance claims in the past. Policies with higher limits or lower deductibles are usually more expensive.
There’s variation within the industry, too. For example, janitorial services may pay half as much for general liability insurance as landscapers. That’s because landscaping comes with higher risks — both for injury and for causing damage to customer property.
Insurance companies tell you how much contractor insurance will cost when they give you a quote. NerdWallet recommends comparing several quotes to find the best coverage for your business at the best price.
Insurance costs for small and independent contractors
Contractors that make less than $10 million in annual revenue can typically get general liability coverage for less than $2,500 per year. That’s according to median annual insurance rates provided to NerdWallet by online brokerage Coverdash. Here’s a breakdown by specific business type:
| Business type | General liability cost (median) | Workers' compensation cost (median) |
|---|---|---|
| Remodeling and home renovation | $1,400 | $3,200 |
| Plumbing (residential) | $2,200 | $4,800 |
| Automotive engine repair | $2,200 | $3,500 |
| Janitorial services | $750 | $2,500 |
| Landscaping services | $1,400 | $4,000 |
Business owners’ policies will cost more than general liability alone, since they also include commercial property coverage. For example, plumbing businesses pay a median of $4,500 a year for a BOP.
Insurance costs for larger contractor businesses
Larger contractor businesses with more employees and projects tend to have a lot more risks to insure against. These median annual rates that Coverdash provided to NerdWallet can give you an idea of costs for contractors with more than $10 million in annual revenue. Not all contractors will need a builder's risk policy.
| Business type | General liability cost (median) | Workers' compensation cost (median) | Builder's risk cost (median) |
|---|---|---|---|
| Roofing contractors (commercial / large residential) | $18,000 | $12,000–$20,000 | $4,000 |
| Aqueduct and water infrastructure construction | $15,000 | $12,000 | $6,000 |
| Underground tank removal (non-hazardous) | $16,000 | $8,000 | $4,000 |
| Pipe, duct and boiler insulation | $12,500 | $10,000 | — |
| Access flooring installation | $11,000 | $6,000 | — |
| Driveway paving and sealing | $8,000 | $7,000 | — |
| Drywall contractors (large operations) | $7,500 | $10,000 | — |
| Glass and glazing (curtain wall installation) | $11,000 | $9,000 | $5,000 |
| Terrazzo and tile refinishing | $8,000 | $6,500 | — |
| Fire sprinkler system installation | $12,000 | $8,000 | $4,000 |
| Commercial renovation contractors (large projects) | $10,000 | $12,000 | $4,000 |
| Structural steel erection | $15,000 | $20,000 | $6,000 |
| Heavy civil construction (bridges, tunnels) | $25,000 | $22,000 | $6,000 |
| Site preparation (large excavation projects) | $12,000 | $10,000 | $5,000 |
| Demolition contractors | $14,000 | $16,000 | $6,000 |
| Power and communication line construction | $16,000 | $18,000 | $5,000 |
How to shop for contractor insurance
Prices differ from one insurer to the next, even for the same coverage. Get multiple quotes from a variety of business insurance providers to make sure you're getting the best deal.
Consider these other factors when comparing policies:
- Liability limits: This is the maximum amount the policy will pay out for each risk it covers. Some policies have two: a limit per incident and one aggregate limit over the life of the policy.
- Policy coverage: What does the policy cover — and what isn’t covered? Note any differences between providers so you can make a fair comparison.
- Price: What's your annual premium and how can you pay it? Evaluate prices with different deductibles, as higher deductibles mean lower premiums.
- Reviews: Read customer and independent reviews. Use sites like the Better Business Bureau and the National Association of Insurance Commissioners to see how many complaints have been filed against each company and why.
- Additional insureds: A company you subcontract for may require you to add it as an additional insured on your policies. This extends your coverage to the hiring contractor. Some insurers charge for this; others don't. If you work as a subcontractor, check on the process and fees for adding additional insureds.
To shop for contractor insurance you can get quotes directly from providers, or use an insurance broker or online marketplace to compare policies.
Individual providers
You can buy a contractor insurance policy directly from an insurance company online or over the phone.
Some providers act as agencies, including Allstate and Progressive, and use a third-party insurer for some coverage types. This means you could buy all your policies from one provider and get a bundling discount, but you may deal with two separate insurers for claims.
Pros
You choose which providers to contact for quotes.
You can get a quote and buy a policy quickly.
Cons
Getting multiple quotes yourself takes a lot of time.
You won't have an unbiased professional to help you figure out what coverage you need.
Carriers may continue to call you after you've already bought a policy.
Insurance brokers
Brokers gather quotes from multiple insurers on your behalf and take time to understand your business needs to help you choose coverage. This is especially helpful if you're a new business owner or your contracting business needs specialized coverage, like a surety bond.
Pros
A broker is an expert who can help you identify the right coverage.
You work with one person instead of making many calls or website visits.
Cons
Some brokers charge fees.
They often work on commission and may try to upsell you.
Brokers aren’t required to find you the lowest rates.
Online marketplaces
Online insurance brokers like Simply Business and Huckleberry also gather multiple quotes for easy comparison. This is similar to visiting a broker, but the online process is often much quicker. It’s a good choice for fast, straightforward coverage needs. There’s no agent, though you can call one if you have questions.
Pros
Option to talk to an insurance expert if you need help.
Get quotes quickly from multiple insurers at once.
Cons
After the quote, you work with the insurer — not the marketplace.
You'll only see quotes from insurers that the marketplace works with.
How to get your certificate of insurance
Once you have coverage, you'll likely receive a certificate of insurance (COI) as proof. Be sure to request one if not, as many clients will ask to see it before signing a contract. You can get new copies by contacting your agent or insurer online or over the phone.
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