General contractor insurance in Colorado
Learn about business insurance requirements and the most common policies for general contractors in Colorado.
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What are the most common policies for general contractors in Colorado?
General contractors may need different types of insurance depending on the work they do. These are the most popular insurance policies for Colorado general contractors to protect against financial losses.
General liability insurance
A general liability policy covers basic third-party risks, such as a client who is injured on your jobsite. Bundle it with commercial property insurance for savings in a business owner's policy.
- Customer bodily injuries
- Damaged customer property
- Advertising injuries
Business owner's policy
A BOP bundles general liability coverage and commercial property coverage at a discount. It's often the most cost-effective type of insurance for general contractors.
- Accidents that injure clients
- Client property damage
- Damage to your building or its contents
Workers’ compensation insurance
Colorado requires workers’ comp for general contracting businesses with employees. It also protects sole proprietors from work injury costs that health insurance might deny.
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Commercial auto insurance
This policy covers the cost of injuries and property damage in accidents involving a general contractor’s business vehicle. It can also pay for repairs to vehicles damaged by weather or vandalism.
- Legal costs from an auto accident
- Property damage caused by your vehicle
- Vehicle theft and vandalism
Contractor's tools and equipment insurance
This policy helps pay for repair or replacement of a contractor’s saws, nail guns, hammers, and other tools if they're lost, stolen, or damaged.
- Hand tools and power tools
- Scissor lifts and other equipment
- Other items brought to worksites
Professional liability insurance
This policy is also called errors and omissions insurance (E&O). It covers legal fees when a general contractor is sued over a mistake, such as using the wrong materials.
- Accusations of negligence
- Failure to complete a project
- Work mistakes and oversights
Contractor surety bonds
A bond guarantees reimbursement for the client if a contractor fails to fulfill the terms of a contract or adhere to building codes. Common bonds include bid, performance, and payment bonds.
- Compliance with laws
- Incomplete jobs
- Breach of contract
Builder's risk insurance
This policy covers structures in progress and materials, often paying for damage caused by fire, vandalization, and non-severe weather events.
- New construction
- Building renovation
- Worksite theft and vandalism
Contractors pollution liability insurance
Contractors pollution liability covers costs related to pollution, such as a lawsuit alleging harm caused from exposure to silica dust on a construction job site.
- Pollution events
- Spills during transport
- Lawsuits over contaminants
Which policies are required for general contractors in Colorado?
General liability insurance
If you have a physical location with a commercial lease, your property manager may require you to purchase general liability insurance.
General liability insurance can protect your business from expenses associated with common mishaps, such as customer property damage or bodily injury.
Workers' compensation insurance
The state of Colorado requires all businesses with employees, including general contractors, to provide workers’ compensation insurance, which covers lost wages and medical bills for work injuries.
Sole proprietors and independent contractors should also consider purchasing workers' compensation to protect themselves in the event of an accident or injury while on the job. While it isn't mandatory for single-person businesses, it is highly recommended.
Failing to provide workers' comp in Colorado for employees, with few exceptions, can result in fines or other corrective action against the business.
Commercial auto insurance
If your business owns a vehicle, you likely need to purchase commercial auto insurance to meet state requirements. Auto coverage is required in Colorado for all company-owned business vehicles.
Commercial auto insurance protects your vehicles, employees, and business in the event of a vehicle accident.
Colorado requires the following minimum coverages for businesses:
- $25,000 per person bodily injury liability
- $50,000 per person bodily injury liability
- $15,000 per accident property damage liability
If you use leased, rented, or personal vehicles for company purposes, you'll instead need a hired and non-owned auto (HNOA) policy.
Surety bonds
Licensure requirements in Colorado sometimes include a surety bond, depending on the type of work you do and your location. Denver general contractors, for example, are required to carry a $50,000 surety bond.
A surety bond guarantees reimbursement for the client if a general contractor fails to fulfill the terms of a contract or adhere to building codes. Common types of surety bonds include bid bonds, performance bonds, and payment bonds.
How much does insurance cost for general contractors in Colorado?
General contractors in Colorado who buy policies from Insureon pay an average of:
General liability: $100 per month
Workers' compensation: $357 per month
Commercial auto: $130 per month
Several factors affect the cost of general contractor insurance, including:
- Type of building construction, such as townhouses, multi-family homes, or offices
- Business property and equipment
- Business income and size
- Previous liability claims
- Years of experience in the construction industry
- Policy limits and deductibles
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When do you need a general contractor business license in Colorado?
Colorado general contractors are not required by the state to carry a license. However, general contractors may still require a license depending on the work they do and their location.
Businesses in Colorado are additionally not required at the state level to carry a license, but certain industries and professions may carry specific licensing requirements, such as electricians, roofers, and landscapers.
Colorado licenses fall into three categories: Class A, Class B, and Class C. Each license has rules and restrictions about the type of work that can be performed and the types of buildings that can be modified.
Colorado cities each carry different requirements for their general contractors. For example, Denver requires contractors to obtain a supervisor certificate (or employ someone who has one), and apply for a license with the city before operating.
Aurora, on the other hand, requires contractors to obtain an International Code Council (ICC) certification, pay a fine, and submit an application before providing general contracting services within the city.
Check your city and county requirements before undertaking a construction project to ensure that you and your employees are protected in the event of a workplace injury or other issue.
How do I get Colorado contractors insurance?
Insureon helps general contractors in Colorado save time and money shopping for liability insurance policies by comparing free quotes from top U.S. insurance companies.
Our insurance agents are licensed in Colorado and can answer your questions as you consider the best policies for your insurance needs at an affordable price.
To complete our free online application, gather key information so we can match you with the best insurance agency for your needs, including details about employees and subcontractors, commercial lease insurance requirements, desired coverage limits, and any other pertinent business information.
We can work with you to identify and purchase the best insurance solutions for your business. Most small business owners receive a certificate of insurance the same day.