How much does construction and contractor insurance cost?

Construction businesses and contractors pay an average of $82 per month, or $981 annually, for general liability insurance.

General liability insurance provides financial protection against common lawsuits from customers. It can cover costs if someone sues your business for a bodily injury, property damage, or copyright infringement.

This is the average policy for construction professionals who buy from Insureon:

Insurance premium: $82 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Small businesses can often save money by bundling general liability coverage with commercial property insurance in a business owner’s policy (BOP).

The cost of general liability insurance depends on factors such as the coverage limits you choose, the size of your business, the amount of foot traffic, and any subcontractors or additional insured endorsements.

The cost of general liability insurance depends on your risk of a customer lawsuit. Among construction businesses and contractors that purchase general liability insurance with Insureon, 20% pay less than $50 per month and 61% pay less than $100 per month.

Businesses that interact with many customers and have a higher risk of accidents typically pay more for general liability insurance.

For example, roofers can expect to pay more for general liability insurance than locksmiths and other lower risk professionals. The average monthly cost for a roofer is $267, while the monthly average for a locksmith is $42.

Other factors that affect your premium include business revenue, building maintenance, years in operation, and location. As you can see, the cost varies significantly across professions.

Policy limits are the maximum amounts your insurance company will pay for covered claims. The per-occurrence limit is the maximum your insurer will pay for a single incident, while the 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 (97%) 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.

Construction businesses and contractors pay an average of $98 per month for a business owner's policy, or $1,173 annually. Most choose a BOP with a $1 million per-occurrence limit and a $2 million aggregate limit.

A BOP bundles general liability coverage with commercial property insurance at a discount. It provides financial protection against common lawsuits from customers, and also covers the cost of stolen, damaged, or destroyed business property.

The cost of a business owner's policy depends on factors such as the limits you choose, the size of your business, the amount of foot traffic, and the value of your business property and equipment.

Construction businesses and contractors pay an average of $254 per month, or $3,054 per year, for workers’ compensation insurance.

Workers' comp is a key policy in construction, as workers face a high risk of injury. It helps cover medical expenses from job injuries – which your personal health insurance might exclude. It also supplies partial lost wages during recovery in the form of disability benefits.

Most policies include employer's liability insurance, which covers the cost of lawsuits related to workplace injuries.

There's usually no limit to how much a workers' comp policy can pay for employee benefits, though it depends on state laws.

The cost of workers' compensation insurance depends on several factors, including number of employees and the level of risk involved with their jobs.

Among construction businesses and contractors that purchase workers’ compensation insurance with Insureon, 42% pay less than $200 per month and 65% pay less than $400 per month.

A larger workforce brings a higher risk of worker injuries, which is why bigger businesses tend to pay more for this type of insurance.

Construction businesses and contractors pay an average of $173 per month for commercial auto insurance, or $2,075 annually.

Most states require this coverage for vehicles owned by a business. For personal, rented, and leased vehicles used by your business, look to hired and non-owned auto insurance (HNOA) instead.

A commercial auto policy provides financial protection in the event of an accident involving your business vehicle. It can help pay for property damage, medical costs, and legal expenses.

The cost of commercial auto insurance depends on several factors, including the policy limits you choose, coverage options, the value of the vehicle, and the driving records of anyone permitted to drive.

Construction businesses and contractors pay an average of $14 per month, or $169 per year, for contractor’s tools and equipment insurance.

A form of inland marine insurance, this policy covers the cost of lost, stolen, or damaged tools and equipment. Unlike standard property insurance, it protects your items wherever you bring them, during transit and at a construction site or other job site.

The cost of contractor's tools and equipment coverage depends on the value of your tools and equipment and the type of work you do.

Construction businesses pay an average of $74 per month for professional liability insurance, or $886 annually. This policy is occasionally required by state law, though it's more often needed for licenses and contracts.

Professional liability insurance covers the cost of lawsuits from clients who sue over a mistake, missed deadline, or breach of contract. It's sometimes referred to as errors and omissions insurance (E&O).

Construction contractors who buy this coverage from Insureon can often bundle it with general liability insurance for a discount. The average cost of this bundle is $112 per month for Insureon customers.

The cost of professional liability insurance depends on several factors, including the type of business, your claims history, and the policy limits you choose.

Construction businesses and contractors pay an average of $81 per month for commercial umbrella insurance, or about $977 annually.

This policy boost the limits of your underlying general liability, commercial auto, or employer's liability insurance. When the underlying policy reaches its limit, commercial umbrella insurance activates to cover any costs over that limit, up to the additional limit of your umbrella policy.

The cost of commercial umbrella insurance depends primarily on the amount of coverage you purchase.

Construction businesses and contractors pay an average of $105 per month, or $1,259 per year, for builder's risk insurance. This policy is sometimes called course of construction insurance.

A builder's risk insurance policy provides coverage for structures and materials during a construction project. It will help pay for fires, vandalism, and other types of damage to a structure in progress.

The cost of builder's risk insurance depends on the value of the structure, including materials and labor.

Construction businesses pay an average of $8 per month for surety bonds, or about $100 annually. A surety bond reimburses your client if you're unable to fulfill the terms of a contract or other agreement.

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