Learn about small business insurance requirements and the most common policies for general contractors in Colorado.
Depending on the specifics of your work, general contractors may be required to hold several different types of business insurance. For example, if your business owns a vehicle, you likely need to purchase commercial auto insurance to meet state requirements.
If you have a physical location with a commercial lease, your property manager may require you to purchase general liability insurance. Commonly purchased by general contractors in Colorado, general liability insurance can protect your business from expenses associated with common mishaps, such as customer property damage or bodily injury.
The state of Colorado requires general contractors with employees to provide workers’ compensation insurance, which covers lost wages and medical bills for work injuries.
Depending on your clients and the type of work you do, you may also need builder’s risk insurance or surety bonds.
General contractors may need different types of insurance depending on the work they do and their client contracts. In Colorado, general contractors often buy these policies.
General liability insurance is the foundation of a general contractor’s protection. It covers damage to client property, as well as client injuries and advertising injuries. Most commercial leases require you to have this liability coverage.
Adding commercial umbrella insurance can boost your coverage on general liability insurance and other policies.
General contractors who work independently or own a small company often qualify for a business owner’s policy (BOP). This policy bundles general liability coverage and commercial property insurance together at a discount.
A BOP is the top policy recommended by Insureon's expert agents, as it offers protection against common liability claims and business property coverage at an affordable price.
If you own a construction or home improvement business in Colorado with one or more employees, your business is required to carry workers’ compensation insurance. Workers’ comp can help pay for medical bills and lost wages when an employee is injured on the job.
A commercial auto policy protects vehicles owned by your contracting business. It covers property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.
Contractor’s tools and equipment insurance protects a general contractor’s saws, nail guns, drills, and other construction equipment. Look to this policy or inland marine insurance to protect equipment that moves to different job sites.
Professional liability insurance provides protection when a general contractor is sued for a professional mistake, such as missing a deadline on a construction project. This policy is also called errors and omissions insurance (E&O).
Surety bonds guarantee reimbursement for the client if a general contractor is unable to fulfill the terms of a contract. Common types of surety bonds include bid bonds, performance bonds, and payment bonds.
Builder’s risk insurance can cover fires, vandalism, equipment theft, and other damage done to a structure still under construction.
According to an analysis of Insureon applications, general contractors in Colorado can expect business insurance costs similar to the national median for most policies. For example, the median annual cost of general liability insurance for general contractors in Colorado is $1,250, about the same as the national median.
However, the median annual cost of workers' compensation insurance for general contractors in Colorado is $6,077, which is much higher than the national median of $3,682. Since the cost of this policy depends on how many workers you employ, that might simply mean that companies with more employees than usual purchased this policy.
Keep in mind that costs are determined by your business's specific risks and the amount of insurance coverage you decide to purchase.
Insureon’s industry-leading technology helps general contractors in Colorado save time and money shopping for insurance by comparing policies from top U.S. providers.
Start a free online application to review quotes for the policies that best fit your business. Our insurance agents are licensed in Colorado and can answer your questions as you consider coverage.
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