How much does contractor and construction insurance cost?

Contractors and construction businesses pay on average $69 per month, or $825 per year, for general liability insurance.

This policy provides protection for third-party bodily injuries and property damage, along with advertising injuries.

Insureon’s licensed agents typically recommend a business owner’s policy over a standalone general liability policy. A BOP combines general liability with commercial property insurance to protect a contractor’s business property, and costs less than purchasing each policy separately.

Among construction businesses and contractors that purchase general liability insurance with Insureon, 24% pay less than $600 per year and 48% pay between $600 and $1,200 per year.

Larger businesses that interact with many customers can expect to pay more for this coverage.

Businesses with a higher risk of customer injuries or damage to customer property, such as roofers, typically pay more for general liability insurance than a company with lower risk, such as a locksmith. The size of your business, building maintenance, years in operation, and your location will also affect your premium.

The annual median cost for a roofer is $3,590, while the annual median for a locksmith is $406 – or less than $35 a month. As you can see, the cost can vary significantly across professions.

Policy limits determine how much your insurer will pay on covered claims. A per-occurrence limit is the maximum your insurer will pay for a single incident, while an aggregate limit is the maximum your insurer will pay on any claims during your policy period, typically one year. Higher limits cost more – and provide better coverage.

Most contractors and construction businesses (98%) choose general liability insurance policies with a $1 million per-occurrence limit and a $2 million aggregate limit. As your small business grows, you may need to expand your policy limits.

Learn how to save money on your policy, which coverage limits to choose, and more on Insureon's general liability insurance cost analysis page.

Workers’ compensation insurance is a key policy in construction, as workers face a high risk of injury. It helps cover medical costs from job injuries – which your personal health insurance might exclude. It also supplies part of the wages you'd lose while recovering from a work injury.

Most states require this coverage, but it's a smart purchase even when it's not required. With a median cost of $275 per month, or $3,295 per year for construction businesses and contractors, it could save you thousands in medical bills if you or an employee is injured.

Among construction businesses and contractors that purchase workers’ compensation insurance with Insureon, 35% pay less than $2,000 per year and 23% pay between $2,000 and $4,000 per year. The cost depends on the number of employees and the level of risk involved with their jobs, among other factors.

Learn more about workers' comp insurance premiums on Insureon's workers' compensation insurance cost analysis page.

Construction businesses and contractors pay an average premium of about $150 per month, or $1,830 per year, for commercial auto insurance.

This policy can pay for third-party property damage and medical bills in an accident, along with vehicle damage caused by theft, weather, and vandalism.

Businesses with company-owned vehicles, such as concrete trucks and snow plows, must purchase commercial auto insurance. The cost will vary depending on the type and number of company vehicles, and your unique business risks.

Most construction businesses and contractors choose a commercial auto policy with a $1 million limit.

Learn how coverage limits and other factors affect the cost of this policy on Insureon's commercial auto insurance cost analysis page.

Construction businesses and contractors pay an average cost of less than $15 per month, or $170 per year, for contractor’s tools and equipment insurance.

A form of inland marine insurance, this policy helps pay for repair or replacement of a contractor’s lost, stolen, or damaged tools and equipment. The cost varies depending on the value of your items.

Most construction and contracting businesses choose a limit of $5,000 for their contractor’s tools and equipment policies.

Learn which coverage limits to choose and more on Insureon's contractor's tools and equipment insurance cost analysis page.

Construction businesses and contractors pay an average cost of about $85 per month, or $1,000 per year, for professional liability insurance.

Also known as errors and omissions insurance (E&O), this policy offers critical coverage for contractors, including legal fees related to professional mistakes and accusations of negligence.

Among contractors and construction businesses that purchase professional liability insurance with Insureon, 36% pay less than $600 per year and 27% pay between $600 and $1,200 per year. The cost increases depending on the risk of a business being sued over a professional mistake.

Most construction and contracting businesses choose professional liability policies with a $1 million per-occurrence limit and a $1 million aggregate limit.

Learn how to save money on your policy, which coverage limits to choose, and more on Insureon's professional liability insurance cost analysis page.

Construction businesses and contractors pay an average cost of about $8 per month, or $100 per year, for surety bonds.

A surety bond guarantees that your company will complete a project as promised, and reimburses your client if the contract is broken.

Construction businesses and contractors choose surety bonds with a median amount of $10,000, according to data from Insureon customers.

The cost of the bond is a percentage of the total bond amount. It may also be influenced by your type of work and your credit score.