Business Insurance Requirements for General Contractors in New York

New York City has the most expensive construction market in the world, according to the 2017 International Construction Market Survey by Turner & Townsend. While that might not be good news for developers, it promises plenty of opportunity for New York general contractors to land new clients and make good money. With the appropriate insurance, your contracting business can stay competitive and take advantage of New York's construction needs.

General contractors in New York must be bonded if they work on public construction projects, but license and permit bond requirements vary by county. For example, in New York City, home improvement contractors must be bonded in order to get their license. All employers are required to have workers' compensation insurance in New York. This is true even if you only have one employee. Most projects require proof of general liability insurance and professional liability insurance. Lastly, you need commercial auto insurance if your business owns your vehicle.

Insureon makes shopping for insurance easy with industry-leading technology that gathers quotes from top U.S. carriers that fit your needs. Read more to find out which policies are most common for general contractors in New York, or start an application to get your free quotes today.

Find the right insurance policy for your general contracting business

The most common policies for New York general contractors depend on a variety of factors, including revenue, client contracts, and partnerships. The table below illustrates which policies might work best for your business structure.

 

Business type General liability / BOP Bond Workers' comp
Sole proprietor X X X
Partner X X X
Contractor / freelancer X X X
Employer X X X

 

General liability insurance: General liability insurance is the foundation of a general contractor’s protection. This coverage can address bodily injury, client property damage, product liability, and the cost of legal defense.

Professional liability insurance: Many clients require proof of professional liability insurance before entering contracts for professional services. This policy, also called errors and omissions insurance, can help cover legal expenses if you’re sued over contract disputes.

Business owner's policy (BOP): General contractors sometimes qualify for a business owner’s policy. This package helps your business save money by bundling commercial property insurance with general liability at an affordable rate.

Inland marine insurance: While property insurance can cover equipment that stays at your primary business location, inland marine insurance can cover equipment you use in the field, such as tools you use on the job. These items move from location to location, which subjects them to more opportunities for loss, damage, and theft. That’s why they require special coverage.

Commercial auto insurance: Commercial auto insurance can cover vehicles your business owns or uses for business purposes. If your vehicle is involved in an accident, this policy can cover your liability for the other person's bodily injuries and property damage. It can also pay to repair your car when it is damaged by theft, weather events, or vandalism.

License/permit bond: General contractors often need a license or permit bond before they can start construction projects. This bond offers project stakeholders a guarantee that you will perform your work and adhere to state and town regulations. If you fail to uphold that agreement, the insurance company reimburses the stakeholders for their losses. Unlike a typical insurance policy, you are obligated to pay the insurer back. In many New York municipalities, general contractors must be bonded in order to get their license.

Builder’s risk insurance: Builder's risk insurance addresses unique property exposures that property insurance can’t cover. Primarily, it protects structures in progress from damage caused by fire, vandalization, and non-severe weather events. It can also cover building materials and equipment that must stay on site.

New York workers' compensation insurance: New York state law requires all employers to provide workers’ comp even if they have only one employee. If an employee is injured on the job, workers’ comp can help pay for medical fees and lost wages. Independent contractors and solo business owners can cover themselves under a workers’ compensation policy, but they are not legally required to do so.

Although general contractors aren’t typically exposed to the same physical risks as subcontractors, accidents do happen, especially on worksites. According to the Bureau of Labor Statistics, general contractors most often experience overexertion; slips, trips, and falls; and contact with objects or equipment. When they experienced these injuries, they missed a median of four work days in 2016.

Most Common Workplace Injuries: General Contractors in the U.S.

Business insurance costs for general contractors in New York  

Median insurance costs for general contractors in New York are significantly higher than the national median, according to an analysis of Insureon applications.

General liability insurance costs New York contractors about $1,380 a year ($115 per month), which is close to the national median of $1,342 ($112 per month). However, the median cost of commercial auto insurance in New York is $6,708 ($559 per month), about $4,291 higher than the national median. Workers’ comp is also higher than the national median at $4,799 a year ($399 per month) versus $3,682 ($306 per month). However, it is a mandatory policy in the state if you have employees.

Median Insurance Costs for New York General Contractors

Save time and money with Insureon

Insureon’s industry-leading technology helps general contractors in New York save time and money shopping for insurance by comparing policies from dozens of top U.S. carriers. Simply apply online and review quotes for the policies that best fit your business needs. Our insurance specialists are licensed in New York and can answer your questions as you consider coverage.

To make the application go even quicker, have this information ready:

  • Workforce details, such as the number and types of employees.
  • Current and projected revenue.
  • Business partnerships.
  • Insurance history and prior claims.
  • Commercial lease insurance requirements.

Apply for free general contractor insurance quotes today.