General Contractor Insurance in Illinois
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General contractor insurance in Illinois

Learn about business insurance requirements and the most common policies for general contractors in Illinois.

Which policies are required for general contractors in Illinois?

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 Illinois, a general liability policy can protect your business from legal defense costs associated with common mishaps, such as customer property damage and injuries.

The state of Illinois 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.

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What are the most common policies for general contractors in Illinois?

General contractors may need different types of insurance depending on the work they do and their client contracts. In Chicago and elsewhere in Illinois, general contractors often buy these policies.

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General liability insurance

General liability insurance is the foundation of a general contractor’s protection. It covers damage to client property, as well as third-party bodily injuries and advertising injuries. A commercial landlord, client, or lender might ask you to provide a certificate of insurance showing that you have this liability coverage.

Adding commercial umbrella insurance can boost your coverage on general liability insurance and other policies.

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Business owner's policy

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.

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Workers' compensation insurance

If you own a construction or home improvement business in Illinois 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.

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Commercial auto insurance

Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.

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Contractor’s tools and equipment insurance

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.

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Professional liability insurance

Professional liability insurance provides protection when your contracting business is sued for a professional mistake, such as missing a deadline on a construction project. This insurance coverage is also called errors and omissions insurance (E&O).

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Contractor surety bonds

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.

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Builder’s risk insurance

Builder’s risk insurance can cover fires, vandalism, equipment theft, and other damage done to a structure still under construction.

How much does business insurance cost for general contractors in Illinois?

According to an analysis of Insureon applications, the typical general contractor in Illinois can expect to pay more than the national median for some types of business insurance, but less for other types.

For example, the median annual cost of commercial auto insurance for general contractors in Illinois is $1,707, significantly less than the national median of $2,417.

The median annual premium for a business owner’s policy is just $824, also less than the national median premium. However, general contractors in Illinois can expect to pay more for workers' compensation insurance.

These figures provide a rough estimate of what you can expect. In the end, insurance costs depend primarily on factors like how many employees you have and the policy limits you choose.

Median insurance costs for general contractors in Illinois.

Save time and money with Insureon

Insureon’s industry-leading technology helps general contractors in Illinois save time and money shopping for insurance by comparing policies from top U.S. insurance carriers.

Start a free online application to review quotes for the policies that best fit your small business. Our insurance agents are licensed in Illinois and can answer your questions as you consider coverage.

To make the application go quicker, have this information ready:

  • Workforce details, such as the number and types of employees
  • Current and projected revenue
  • Business partnerships
  • Insurance history and prior claims
  • Commercial lease insurance requirements

Apply for free insurance quotes for general contractors today.

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Updated: June 20, 2023

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