General Contractor Insurance – Which Coverage Options Do I Need To Consider?

Do you know that construction defect claims can be very common and expensive for general contractors? Often, a single claim can cost over six figures in legal and settlement expenses. So, the right general contractor insurance is vital to avoid huge financial hits.

For any general contractor, ensuring your business with strong liability coverage is a must. You might need various business insurance, like commercial auto insurance for business vehicles, general liability insurance for damage or injury claims, and workers’ compensation insurance if you have employees.

Thinking about other coverages is also wise. This includes builder’s risk insurance, surety bonds, professional liability insurance, and more. It’s important to know your business’s risks well and choose insurance that fits them.

Key Takeaways

  • Construction defect claims can lead to major legal and settlement costs for general contractors.
  • General contractor insurance protects against a range of risks, like liability claims and workplace injuries.
  • Important insurances to consider are general liability, commercial auto, workers’ comp, builder’s risk, and more.
  • Contractors should evaluate their risks and team up with a skilled insurance agent for the right coverage.
  • Not having enough insurance can risk general contractors facing big expenses from claims and lawsuits.

Essential Insurance Coverages for General Contractors

Securing the right insurance coverage is key for general contractors to keep their business safe. Protecting from liabilities and financial losses is vital with the right policies.

Contractor’s General Liability Insurance

contractor’s general liability insurance is crucial. It shields your business from third-party claims. These claims might include bodily injury, property damage, and advertising injuries from your work. Without it, lawsuits could seriously harm your finances.

Products and Completed Operations Insurance

This coverage is important for damage related to your work or products. It extends the protection of general liability insurance. This is key for contractors who work on permanent fixtures or who manufacture products.

Equipment Coverage

Tools, equipment, and machinery are vital for contractors. contractor’s tools insurance keeps these assets safe. It covers risks like theft, vandalism, and weather damage, allowing swift equipment replacement or repair.

Workers’ Compensation Insurance

If you have workers, worker’s comp insurance is often legally required. It covers their medical care and lost wages if they get hurt or sick on the job. This policy protects your workers and your company from legal issues.

Commercial Property Insurance

For contractors who own their workspaces, commercial property insurance is a must. It protects your buildings, offices, and warehouses from risks like fire and theft. It’s crucial for keeping your business premises safe.

Commercial Auto Insurance

If your business uses vehicles, commercial vehicle insurance is essential. It covers accidents, theft, and other losses for your company’s cars or trucks. This policy guards against financial risks related to your business vehicles.

Additional Recommended Coverages

Being a general contractor means you need solid insurance. It keeps your business safe from risks. Apart from basic coverage, consider extra policies. These ensure you have enough excess liability limits and cover specific risks.

Commercial Umbrella Insurance

A commercial umbrella insurance policy adds more protection. It extends beyond your main liability, auto, and employer policies. If a claim is huge, it covers costs above the regular limits. This is key for protecting your business from major losses.

Hired and Non-Owned Auto Insurance

For using vehicles not owned by your company, get hired and non-owned auto coverage. It protects against injuries or damage they might cause. This fills coverage gaps for vehicles rented or used for business.

Leased Equipment Coverage

You need tools and equipment to finish your projects. Rented equipment insurance is crucial. It pays for repair or replacement if this equipment is damaged or stolen in your care.

Employment Practices Liability Insurance

As your workforce grows, consider EPLI coverage. This policy guards against employee claims like discrimination or wrongful termination. It helps with the high costs of legal defense.

Understanding construction requirements and liabilities is hard. An experienced insurance agent can guide you. They’ll help pick the right coverages and limits for your business.

General Contractor Insurance Coverages for Larger Projects

Undertaking big projects as a general contractor means more risks. So, it’s smart to get extra insurance. You should think about getting environmental impairment insurance and contractor E&O insurance.

Pollution/Environmental Liability Insurance

Building can sometimes add pollutants to the air or ground. This can be costly to clean up and bring on legal troubles. Environmental impairment insurance covers contractors if they face claims from others for injury, damage, or clean-up costs due to accidents while working or at project sites.

Professional Liability Insurance

General contractors also do jobs like consulting, design, and managing projects. But these services can come with risks, such as design flaws or hiring the wrong people. Contractor E&O insurance protects against claims of mistakes. It makes sure you’re covered if someone sues for things like bad designs or not keeping to a contract.

Adequate insurance coverage is crucial for general contractors, especially when undertaking larger projects with increased risks. Policies like environmental impairment insurance and contractor E&O insurance can provide valuable protection against potential liabilities and financial losses.


As a general contractor, getting the right insurance is key to protect your business. General liability insurance and workers’ compensation insurance are basic needs. But, for bigger jobs or special work, you might need more coverage like pollution liability or umbrella insurance. These extras help cover risks that come with different jobs.

Figuring out the world of contractor insurance is tough. Still, having a skilled insurance pro by your side makes a big difference. They can help you pick the best combination of coverages and limits. With their help, you’ll spot any missing protections and get a plan that fits your business just right.

Having the right insurance setup is a smart move for your business’s future. It shields you from big costs of claims and lawsuits, letting you work worry-free. This way, you can focus on your craft and building strong ties with your clients.


What are the essential insurance coverages for general contractors?

General contractors should have several key insurance types. These include general liability, products and completed operations, and worker’s comp. They also need coverage for their tools and vehicles, as well as commercial property and auto insurance.

What does contractor’s general liability insurance cover?

This insurance protects contractors from third-party claims. It covers bodily injuries, property damage, and advertising issues linked to their work.

What is products and completed operations insurance?

This insurance helps contractors deal with property damage or injuries. These incidents may happen because of products they made or jobs they finished.

What is equipment coverage or inland marine insurance?

Equipment coverage, sometimes called inland marine insurance, shields tools and equipment. It guards against theft, vandalism, and natural disasters.

Is workers’ compensation insurance required for general contractors?

If contractors have employees, they typically need workers’ comp. This insurance helps with medical costs and wages if employees are injured at work.

What additional coverages should general contractors consider?

General contractors should also think about umbrella insurance and more. This includes auto coverage for vehicles not owned by the business and coverage for rented equipment. They should also consider EPLI, protection against pollution, and professional liability.

What does professional liability insurance cover for general contractors?

This insurance, known as E&O, defends against claims of mistakes. It protects contractors from negligence claims, unqualified subcontractors, and errors in plans and specifications.

Source Links

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  • Am Trust
  • Attune
  • and many more..

*Disclaimer: Information on this website is general insurance advice. Please speak with a local insurance professional as they are able to analyze the nuances of your specific business. This is an important step to ensure you don’t have any unknown gaps in your coverage.

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