General contractor insurance in Virginia
Learn about business insurance requirements and the most common policies for general contractors in Virginia.
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What are the most common policies for general contractors in Virginia?
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 Virginia, and often provide the best coverage for their insurance needs.
General liability insurance
This policy covers basic risks, such as a client who trips over your toolbox and suffers an injury. Bundle it with commercial property insurance for savings in a business owner's policy.
- Customer bodily injuries
- Damaged customer property
- Product liability insurance
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
Virginia requires workers’ comp for general contracting businesses that have three or more 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 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 general contractor fails to fulfill the terms of a contract or adhere to building codes. Common bonds include bid bonds, performance bonds, 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. It's sometimes referred to as environmental insurance.
- Pollution events
- Spills during transport
- Lawsuits over contaminants
What insurance is required for general contractors in Virginia?
General liability insurance
General liability insurance is the foundation of a general contractor’s protection. It covers legal fees related to accidents that damage a client's property or cause a bodily injury, along with libel and other advertising injuries.
Contractors in Virginia may be required to have a general liability policy depending on the counties they work in, like Chesterfield [PDF] and Radford [PDF] counties, and the type of work they do. This policy might also be required 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.
Workers' compensation insurance
If you own a construction or home improvement business in Virginia with three or more employees, your business is required to carry workers' compensation insurance.
Workers' compensation insurance covers medical care 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 professions, such as carpenters, electricians, and plumbers.
Sole proprietors may not need workers' comp for their Virginia general contractor license, but it's still a good idea to carry this coverage. Personal health insurance doesn't cover work-related personal injuries, so it can save you from out-of-pocket medical expenses.
Commercial auto 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.
Virginia's requirements for auto liability insurance coverage are:
- $50,000 bodily injury liability per person
- $100,000 bodily injury liability per accident
- $25,000 property damage liability per accident
Personal, rented, and leased vehicles driven for work purposes should be covered by hired and non-owned auto insurance (HNOA), as personal auto policies usually exclude business use.
Surety bonds
Licensure requirements in Virginia sometimes include a surety bond, depending on the type of work you do.
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 contactors in Virginia?
General contractors in Virginia who buy policies from Insureon pay an average of:
General liability: $64 per month
Workers' compensation: $369 per month
Commercial auto: $183 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
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When do you need a general contractor business license in Virginia?
In Virginia, from Richmond to Virginia Beach, general contractors must be registered and licensed to work. Depending on the license class [PDF], your requirements for obtaining the license might vary.
There are three classes of license limitations, which determine the dollar size of projects the licensee can undertake:
- Class A: Allows contractors to work on projects valued at $120,000 or more, with a total value of $750,000 for all projects undertaken in a 12-month period.
- Class B: You're able to work on projects valued between $10,000-$120,000, with a total value of $150,000-$750,000 for all projects in a 12-month period.
- Class C: Contactors can undertake projects valued between $1,000-$10,000, with a total value less than $150,000 for all projects acquired in a 12-month period.
Licensure requirements include:
- Completing a pre-license education class
- Meeting relevant work experience requirements
- Paying the appropriate licensing fee
- Adhering to any city or county specific requirements, including certifications, licenses, and insurance
View details on the Virginia Department of Professional and Occupational Regulation website.
How do I get Virginia contractors insurance?
Insureon’s industry-leading technology helps general contractors in Virginia save time and money shopping for business liability insurance. Start an online application to get free 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, most affordable coverage for your Virginia business. Small business owners can get their certificate of insurance shortly after they apply for quotes and pay for a policy.