General Contractor Insurance in North Carolina
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General contractor insurance in North Carolina

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

What insurance is required for general contractors in North Carolina?

General contractors in North Carolina must carry the following insurance coverage to comply with state laws:

Workers’ compensation insurance icon

Workers' compensation insurance

If you own a construction or home improvement business in North Carolina with three or more employees, your business is required to carry workers' compensation insurance.

Workers' compensation insurance covers medical bills and disability benefits when an employee is injured on the job or develops an occupational illness. It's a key policy for the construction industry and related fields due to the hazards of working with heavy equipment and machinery.

Sole proprietors may not need workers' comp for their North Carolina general contractor license, but it's still a good idea to carry this coverage. Personal health insurance doesn't cover work-related injuries, so it can save you from out-of-pocket medical expenses.

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Commercial auto insurance

If your business owns a vehicle, you must carry commercial auto insurance that meets the state's minimum requirements for auto liability insurance.

Commercial auto insurance protects business 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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What are the most common policies for general contractors in North Carolina?

General contractors may need different types of insurance depending on the work they do and their client contracts. These policies are the most popular for general contractors in North Carolina, and often provide the best coverage for their insurance needs.

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General liability insurance

General liability insurance is the foundation of a general contractor’s protection. It covers accidents that damage a client's property or cause a bodily injury, along with libel and other advertising injuries.

Contractors in North Carolina may be required to have this policy depending on the counties they work in and the type of work they do, as well as to sign a commercial lease or meet the terms of a client's contract. Adding commercial umbrella insurance can boost the coverage limits on commercial general liability insurance and other policies.

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Business owner's policy (BOP)

Licensed contractors who work independently or own a small company often qualify for a business owner’s policy. This policy bundles general liability coverage with commercial property insurance 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.

Contractor’s tools and equipment coverage icon

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 from place to place.

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Professional liability insurance

Professional liability insurance provides protection when a general contractor is sued for a professional mistake, such as a missed deadline on a construction project. This policy is also called errors and omissions (E&O) insurance.

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Contractor surety bonds

Surety bonds guarantee 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.

Builder’s risk insurance icon

Builder's risk insurance

Builder’s risk insurance can cover fires, vandalism, equipment theft, and other damage done to a structure still under construction. Project owners may require this coverage for contractors and subcontractors, or you may be able to join their policy as an additional insured.

Depending on the counties or cities your business operates, you may be required to carry this coverage.

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Contractors pollution liability (CPL) insurance

Contractors pollution liability insurance covers costs related to pollution, such as a lawsuit alleging harm caused from exposure to silica dust on a construction job site. It's sometimes referred to as environmental insurance.

How much does small business insurance cost for general contractors in North Carolina?

Construction contractor calculating insurance costs.

General contractors in North Carolina who buy policies from Insureon pay an average of:

General liability: $114 per month
Workers' compensation: $318 per month
Commercial auto: $184 per month

Several factors affect the cost of general contractor insurance, including:

  • Type of building construction, such as townhouses, multifamily homes, or offices
  • Business property and equipment
  • Business income and size
  • Years of work experience
  • Policy limits and deductibles

When do you need a general contractor business license in North Carolina?

In North Carolina, from Raleigh to Charlotte, general contractors must be registered and licensed to work on projects worth more than $30,000. Depending on the license limitation and classification, your requirements for obtaining the license might vary.

There are three tiers of license limitations, which determine the dollar size of projects the licensee can undertake:

  • Limited license: Allowed to take on individual projects up to $750,000 each
  • Intermediate license: Is permitted to undertake individual projects up to $1,500,00 each
  • Unlimited license: Has no dollar limit on the size of the projects the contractor can take

Additionally, there are four types of license classifications, which determine the type of project you're allowed to work on:

  • Building contractor: Covers all building construction and demolition activity for commercial, industrial, institutional, and residential, as well as work done under specialty classifications
  • Residential contractor: Covers all construction and demolition activity for the construction of residential units and select specialty classifications
  • Highway contractor: Covers all highway construction activity, and work done under select specialty classifications
  • Public utilities contractor: Covers operations of construction work on water and wastewater systems, and certain sub-classifications of facilities
  • Specialty contractor: Covers all construction operation and performance of contract work outlined in Rule .0202 [PDF]

Licensure requirements include:

  • Must be at least 18 years of age
  • Meet the minimum financial requirements for the specified limitation and classification
  • Pass a trade exam and background check
  • Possess good moral character

View details on the North Carolina Licensing Board for General Contractors website.

How do I get North Carolina contractors insurance?

Insureon’s industry-leading technology helps general contractors in North Carolina save time and money shopping for insurance. Start a free online application to get quotes from top-rated U.S. insurance companies.

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

A licensed insurance agent can answer your questions and help you find the right coverage for your business. Contractors can get their certificate of insurance shortly after they apply for quotes and pay for a policy.

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Updated: October 13, 2023

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