General Liability Insurance for Contractors

General liability protects you when your work causes injury to someone else or damage to someone else's property — a client trips over your extension cord, a subcontractor's mistake floods a client's basement, a piece of siding falls and dents a parked car. It pays for the legal defense and the settlement or judgment, up to your policy limits.

It does not cover the quality of your own work. If you install a roof and it leaks two years later, that's a workmanship issue, not a liability claim, and it's typically excluded — that's what a warranty and, in some states, completed operations coverage extensions are for.

A certificate of insurance (COI) is the one-page proof of coverage that general contractors, property managers, and many municipalities require before you can even step on site. Most GCs also require you to name them as an 'additional insured' on your policy, which extends your coverage to protect them if your work causes a claim on their project — this is standard practice, not a red flag, and your agent can add it in minutes for a small fee.

Most residential contracts require at least $1 million per occurrence / $2 million aggregate — the industry-standard minimum. Annual premiums for a small operation commonly fall between $500 and $3,000 depending on trade and revenue; higher-risk trades like roofing, demolition, and excavation sit at the top of that range.

Letting this policy lapse, even briefly, can cost you a bid — many GCs check active status before awarding work, not just at signing.