Construction Business Insurance
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Cheap contractor’s insurance

Contractor’s liability insurance may be required to obtain a license, comply with state laws, and qualify for contracts. With Insureon's expert insight and guidance, we can help you find the best insurance for your contracting business at the most affordable price.

How do I find cheap contractor’s insurance?

Let’s take a look at four ways contractors can save money on their insurance coverage:

  1. Shop around. Work with an Insureon agent to source quotes from different insurers.
  2. Bundle your policy. Pair your business liability policy with property insurance to save money.
  3. Customize your policy. Adjust your coverage limits, deductible, and policy options to save on your premium.
  4. Manage risks. Cut your number of insurance claims and pay less for insurance.
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1. Shop around and compare contractor insurance quotes from multiple companies

Comparing prices and policies from multiple insurance carriers is one of the first steps to finding affordable contractor’s insurance.

You might contact each insurance company separately to get a quote, although this task is much easier by working with an online insurance marketplace, like Insureon, where you can compare free insurance quotes from multiple providers in real time.

Choosing a policy with the lowest premium might not be your best option, as each provider could offer policies with different exclusions, deductibles and coverage limits.

Find the right coverage with Insureon

With Insureon, you can get free quotes from top-rated insurance companies after filling out our online application, which takes just a few minutes to complete.

If you need help comparing policies and considering your options, our licensed insurance agents are available to help you figure out which types of insurance you need for your business. Once you choose your policies, you can get coverage and a certificate of insurance in less than 24 hours.

How much does contractor insurance cost?

Construction contractor calculating insurance costs.

The cost of contractor insurance depends on several factors, including:

  • The type of construction and contracting services you offer, such as roofing or handyman services
  • Your property and equipment
  • Your business operations, payroll, and revenue
  • The number of employees you have on staff
  • The policies you need, such as builder's risk, pollution liability, or a surety bond
  • The coverage limits and deductibles for each policy

2. Bundle your insurance policies together

One easy way to save money on contractor insurance is to combine two essential coverages into one policy, known as a business owner’s policy (BOP). This is usually less expensive than buying your general liability insurance policy and property coverage separately.

A BOP bundles:

General liability coverage, which is typically the first policy a small business owner purchase. It safeguards your contracting business from lawsuit costs and medical bills related to third-party accidents, such as a customer slipping and falling. It also covers accidental copyright infringement and other advertising injuries.

Commercial property insurance covers the financial loss of costly repairs or the replacement of business property and equipment. It can help your business recover from property damage after a fire, storm, or burglary.

Another perk of a business owner's policy, is that you can often include additional coverages in your bundle, such as:

  • Business interruption insurance covers a loss of business income if your contracting business is forced to temporarily close, due to a fire or other covered claim. It can help cover day-to-day expenses, lost revenue, and rent or relocation costs.
  • Hired and non-owned auto (HNOA) insurance provides liability coverage for accidents involving personal, leased, or rental vehicles used by your business. If you or your employees drive a personal truck or other vehicle for work, HNOA would cover your business in the event of an incident.
  • Electronic data liability coverage can help protect your business from risks of lost or corrupted data, including computer software, digital documents, and employee or customer records.
  • Contractor's tools and equipment insurance, a type of inland marine insurance, helps pay for the repair or replacement of a contractor's tools and equipment if they're lost, stolen, or damaged. The items typically must be less than five years old and valued at less than $10k.

3. Customize your insurance policies

There are a few ways that you can customize your insurance coverage to save money on your contractor insurance. The right coverage will meet all aspects of your business needs but not exceed it.

Workers' compensation insurance, which helps pay for medical expenses if you or an employee gets injured, is required in almost every state if you have employees. However, some policyholders may be able to save money on their workers' comp with a pay-as-you-go policy or ghost policy.

Additionally, commercial umbrella insurance is a good way to save money and extend liability coverage limits if you’re concerned about escalating legal costs.

Finally, most states have commercial auto insurance requirements for small businesses that own a vehicle. However, you can adjust your policy to choose less expensive options. Some areas you can save include lower policy limits, a higher deductible, and opting out of pricier coverage options.

Save money by knowing your coverage options

You can also choose policy options that provide the right amount of protection for a reasonable cost. For example, paying your premium on an annual basis, rather than monthly, will likely earn you a discount from your insurance company.

Deductible. Choosing higher deductibles and lower coverage amounts can also reduce your premiums, although this should be done carefully.

The deductible is the amount of money you would pay out-of-pocket on a claim, before your insurance coverage kicks in. Choosing a high deductible or a low coverage amount can cost you more in the long run if you face some expensive claims.

Coverage limits. When purchasing business property insurance, your coverage limits should match the value of your business equipment. Should that amount change, you’ll need to update your policy as well.

A liability policy will have a per-occurrence limit and an aggregate limit. A per-occurrence limit is the maximum amount an insurance company will pay on individual claims. The aggregate limit is how much it’ll pay for all claims during a policy period, which is usually one year.

Additional insureds. Consider choosing a blanket additional insured endorsement, rather than named endorsements. While prices can vary from insurance provider to policies, a blanket endorsement typically proves to be more cost-effective in the long run.

4. Manage your contracting risks to keep your premiums low

Avoiding claims in the first place not only protects your bottom line, by reducing your out-of-pocket costs, but it can also help keep your premiums low. That requires managing and reducing your risks wherever possible.

Identify potential risks

Before you start a project, it’s a good idea to analyze each aspect of a particular job, the potential hazards involved, and how you’ll avoid or mitigate them. This can save you time and money in the long run, while reducing the chance of an expensive accident.

Hire the right people

Whether it’s an employee or a subcontractor, everyone who works for you should have the licensing required to perform their tasks, and a commitment to perform each job in a safe and quality manner. This can help you avoid bodily injury claims from employers and subcontractors or claims of unsatisfactory work from your customers.

Establish protocols

All of your employees and subcontractors must understand and follow your commitment to safety.

Make sure everyone on a job site has the right skills to do any task they’re assigned to. Establish safety protocols and procedures for each job, according to industry standards and safety laws. Make sure everyone on a job site knows the hazards and risks they’re dealing with.

Have regular updates on safety protocols, and check that everyone who works for you is following them. Inspect each person’s work to make sure it’s being done in accordance with local building codes, and the customer’s expectations.

Use the right materials

Good quality tools and materials not only keep your employees and customers happy, but they can also reduce risks. Make sure your tools are in good working order, and that all deliveries meet your standards for quality.

Document your work

Fully document the materials you use and how each job was performed, in case a customer has any questions or complaints. This can also help in case a local building inspector has questions or concerns about your work.


Open and periodic communications with your customers, employees, and subcontractors can help address minor concerns before they become larger ones or turn into a lawsuit.

Get affordable contractor business insurance today

View video transcript.

You know you need insurance for your small business, but where to start? And how can you keep costs down?

Insureon is here for you. You can get customized quotes from top carriers. Most small businesses start with a general liability policy. You can combine property coverage with your liability insurance at a discount of $57 per month.

Maintaining a safe work environment can help you manage risk and lower your insurance costs too. Get affordable insurance from the best carriers. Start your application now! Insureon. Protection is peace of mind.

What other types of business insurance do contractors need?

Whether you’re a general contractor, carpenter, commercial builder, or independent contractor, you’ll likely need certain construction contractor liability policies to obtain a contractor’s license or building permits, comply with state laws, or to qualify for contracts.

Even when not required, these additional liability policies can financially insulate your business from expensive lawsuits:

Professional liability insurance

Professional liability insurance, also called errors and omissions insurance, protects small businesses against the costs of client lawsuits over unsatisfactory work. If a customer accuses you of missing a defect as a home inspector, this policy can help with your cost of a lawsuit and settlement.

Builder's risk insurance

Builder's risk insurance, also known as course of construction insurance, covers structures under construction in case of damage from fire, theft, vandalism, and other risks.

Contractor’s pollution liability insurance

Contractor’s pollution liability (CPL) insurance is a type of environmental insurance for the construction industry that covers pollution liability risks for contractors and their subcontractors. If someone accuses your excavation and grading business of causing polluted conditions or contamination to the soil.

Surety bonds

Surety bonds act as a contract between a business, a client, and an insurance company. They guarantee the insurer will reimburse the client if the business fails to deliver contracted services.

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How to get cheap contractor’s insurance quotes from trusted carriers with Insureon

Complete Insureon’s easy online application today to get free quotes for contractor business insurance policies from top-rated U.S. insurance providers. You can also speak with an agent about the types of small business insurance you need and any discount bundles for general liability and other insurance products.

Once you find the right policy, you can usually begin coverage and get your proof of insurance in less than 24 hours.

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Updated: July 2, 2024

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