Business Insurance Requirements for General Contractors in Pennsylvania

Pennsylvania’s housing market has continued to rebound strongly since the Great Recession. Buoyed by cities such as Pittsburgh and Philadelphia, median home values are rising amid high demand and a constrained inventory. As developers struggle to renovate and build homes fast enough to sell them, general contractors deal with the physical labor. There’s plenty to do without spending a lot of time thinking about business insurance for your contracting company.

Pennsylvania insurance regulations for general contractors can vary depending on the location. Contractors often have to be licensed through the cities and towns they plan to work in, many of which have specific requirements for contractor insurance and bonding. For example, Pittsburgh requires proof of general liability insurance with a limit of $300,000. In Scranton, the required limit is $500,000. Some municipalities might require proof of contractor’s professional liability insurance. Pennsylvania state law requires nearly all small businesses with one or more workers to carry workers’ compensation insurance.

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 Pennsylvania, and start an application to get your free quotes today.

Find the right insurance policies for general contractors

The most common policies for general contractors vary depending on a number of factors, including revenue, client contracts, and partnerships. The table below illustrates which policies might work best for your business type.

 

Business type General liability / BOP Bond Workers' comp
1099 or independent contractor X X  
Business owner with employees X X X
Solo business owner X X  

 

General liability insurance: General liability insurance is the foundation of a general contractor’s protection with coverage that extends to bodily injury, client property damage, advertising injury, and the cost of legal defense. Most commercial leases require you to have this coverage.

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 or contractors’ liability insurance, can help cover legal expenses if you’re sued for unsatisfactory work or a business discrepancy. The towns in Pennsylvania that you work in may require you to have this coverage.

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 items you use in the field, such as tools and any other equipment 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 car or truck 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 vehicle 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 or 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. Surety bonds are required in Pennsylvania.

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.

Pennsylvania workers' compensation insurance: Pennsylvania state law requires nearly all small businesses with one or more workers to carry workers’ compensation insurance. If an employee is injured on the job, workers’ comp can help pay for medical fees and lost wages. Pennsylvania runs a competitive state fund, meaning coverage can be purchased through a private insurer or through the state. In physically demanding industries such as construction, injuries can have a severe impact on the productivity of your employees and the success of your small business. Most construction-related businesses make safety a top priority, but accidents can happen at any job site. General contractors most commonly sustain injuries resulting from overexertion, followed by falls, slips, and trips, according to data from the Bureau of Labor Statistics shown in the chart below.

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

Business insurance costs for general contractors in Pennsylvania

Insurance costs for general contractors in Pennsylvania generally trend higher than the national median, according to an analysis of Insureon applications. At $64 per month, the median cost of a general liability insurance policy is around $600 per year lower than the national rate. However, this potential savings is balanced out by an inland marine insurance policy that is about 10 times higher in Pennsylvania than in other states. Workers’ compensation is typically the most costly policy for general contractors, but general contractors in Pennsylvania spend $1,000 less on this policy than the nationwide median.

Median Insurance Costs for Pennsylvania General Contractors

Save time and money with Insureon

Insureon’s industry-leading technology helps general contractors in Pennsylvania 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 Pennsylvania 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.