Contractor Insurance Cost Guide

General liability is the policy almost every client, GC, and permitting office will ask to see, and for a small contracting operation it typically runs $500-$3,000 a year depending on trade risk and revenue. Roofers and demolition crews sit at the top of that range; painters and landscapers sit near the bottom.

Workers' compensation becomes mandatory in most states the moment you hire your first employee, and cost is driven by payroll and your trade's injury risk classification — expect anywhere from a few hundred to several thousand dollars per employee per year for higher-risk trades like roofing or framing.

Commercial auto covers your work trucks and trailers and generally costs more than personal auto because of the higher liability limits and business use — often $1,200-$3,500 per vehicle annually.

Tools and equipment coverage (sometimes called inland marine) protects the gear that rides in your truck, which standard liability policies usually exclude. Professional liability matters more for design-build contractors who give advice or specifications, not just install what someone else designed. An umbrella policy adds a relatively cheap extra layer of liability on top of your existing limits and is worth it once you're bidding larger jobs.

Insurers price on payroll, revenue, claims history, and safety practices. Bundling policies with one carrier, keeping a clean claims record, documenting a safety program, and reviewing coverage annually instead of auto-renewing all reliably bring the number down. Get at least three quotes — the spread between carriers for identical coverage on a small contracting business is often 20-30%.

Use our Insurance Cost Calculator to get a starting estimate by trade and state before you call for quotes, so you know roughly what a fair number looks like.