General Contractor Insurance in Georgia

The State Licensing Board for Residential and General Contractors in Georgia requires all general contractors to carry general liability insurance to apply for and maintain a license.

The amount of coverage you need depends on the type of license:

• Residential Basic: $300,000 per occurrence
• Residential Light Commercial: $500,000 per occurrence
• General Contractor: $500,000 per occurrence
• General Contractor Limited Tier: $500,000 per occurrence

General liability insurance is the most common type of liability insurance. It protects your construction business from expenses associated with third-party mishaps, such as customer injuries and accidental property damage.

Most commercial leases also require businesses to carry this coverage. Adding commercial umbrella insurance can boost your coverage on general liability insurance and other policies.

Contractor general liability insurance can also help protect against advertising injuries, such as libel, slander, and copyright infringement. So, for example, if an employee at your business posts false negative comments about a competitor on social media, your policy would help pay for legal costs if the other business sues.

To comply with licensing requirements and state laws in Georgia, general contractors with three or more regular employees must provide workers’ compensation insurance. You may also need this coverage to sign a contract with a client.

Workers' comp covers medical bills for work-related injuries and provides disability benefits while an employee is recovering and unable to work. If you're injured on the job, your health insurance provider can deny the claim. That could leave you paying for an expensive medical treatment, or out of work with no recourse for your lost wages.

Sole proprietors and others who are not required to carry coverage can still buy workers' comp for themselves and for their employees. It's especially important for those who face a high risk of injury, such as roofers, tree service technicians, and HVAC contractors.

When you buy a workers' comp policy in Georgia, it comes with employer's liability insurance. This policy helps pay for legal fees if an employee files a lawsuit blaming your construction business for their injury.

A commercial auto policy is required in Georgia for all vehicles owned by your general contracting company. It covers property damage and medical bills resulting from an accident, along with vehicle theft, weather damage, and vandalism.

Auto insurance requirements for Georgia businesses include a minimum of:

• $25,000 bodily injury liability per person
• $50,000 bodily injury liability per accident
• $25,000 property damage liability per accident

You may want to consider additional coverage, depending on the kind of work you do and the vehicles you own.

If you drive your own vehicle for work purposes, or rent or lease a vehicle for business use, you'll need a separate policy called hired and non-owned auto insurance (HNOA). Your personal auto insurance policy won't cover incidents that happen while you're driving for work, with the exception of a commute.

General contractors in Georgia can buy a surety bond in the amount of $25,000 to show proof of financial responsibility, which is required for their license. Cities and other municipalities in the state may also require contractors to be bonded and insured.

Different types of bonds act as financial guarantees during a construction project. For example, you might need a bid bond to bid on a project, or a performance bond to sign a contract with a client.

A surety bond guarantees reimbursement if a general contractor fails to fulfill the terms of a contract. Unlike an insurance claim, this amount must be paid back to the company that issued the bond.