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General liability insurance for contractors and construction businesses
General liability insurance covers basic risks in the construction industry, like accidental damage to a client's property or a customer injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.
General liability insurance covers common risks
From carpenters and welders to handymen and general contractors, construction businesses and contractors face high risks.
General liability insurance offers basic protections by helping pay expenses related to third-party bodily injuries and property damage, such as a customer injured by a piece of equipment.
A general liability insurance certificate also helps you meet the insurance requirements of contracts, leases, and professional licenses.
If a visitor is injured at your jobsite or property damage occurs during a renovation, for instance, general liability insurance can cover medical bills or the cost of repairs. This policy provides liability insurance coverage related to:
- Customer personal injuries
- Customer property damage
- Libel and slander
- Product liability
Whatever your specialty, general liability insurance can provide crucial protection against common and unforeseen risks.
Get general liability insurance quotes for construction businesses and contractors
What can general liability insurance cover for construction businesses and contractors?
Customer injuries
If a customer trips over a tool box or a ladder while you’re doing electrical or carpentry work, you could be blamed for the injury. If the person sues, you could end up paying for medical payments and legal expenses. General liability insurance covers:
- Attorney fees
- Court-ordered judgments
- Settlements
- Medical expenses
- Funeral expenses in fatal incidents
This policy does not cover employee injuries. For that, you’ll need to purchase workers’ compensation insurance.
Customer property damage
Accidents can be costly for builders and contractors. General liability insurance safeguards small businesses when client property is damaged during construction projects.
For example, if a client’s furniture is damaged during remodeling, your general liability policy could help pay for the cost of repair or replacement. This policy can also cover the cost of a lawsuit if a client decides to take you to court over damaged property.
Libel and slander
While advertising your company and its construction services, it’s possible to inadvertently copy a competitor’s slogan or mimic another advertising campaign. Accidental advertising injuries are covered by general liability insurance, including:
- Copyright infringement
- Defamation, both libel (written) and slander (spoken)
Product liability
Construction businesses and contractors should make sure their contractor liability insurance includes product liability insurance, also known as products-completed operations coverage. This insurance protects your business when your finished work caused a bodily injury or property damage due to faulty workmanship.
For example, say a plumber installs a new sink in a kitchen. Two weeks later, the homeowner discovers the sink has leaked and damaged their expensive kitchen floor. This coverage would help pay the plumber's legal costs if the homeowner files a lawsuit over the faulty installation.
Add coverage for data breaches to your contractor insurance
Any construction company that handles sensitive information, including customers' credit cards, should invest in cyber insurance. Also called data breach insurance, this coverage helps businesses recover from a data breach or cyberattack. It can help pay for:
- Notifying affected customers
- Cyber extortion payments
- Credit monitoring services
- Data recovery
- Data breach investigations
Data breach costs can add up quickly, and a cyberattack could knock your business offline for a significant time. You can add this coverage to your general liability policy as an endorsement to gain financial protection against common cyber exposures.
How much does contractor general liability insurance cost?
Construction and contracting professionals pay an average of $80 per month for general liability insurance.
Insurance costs for construction companies and contractors are based on a few factors, including:
- Type of construction and contracting services offered
- Business revenue and number of employees
- Where your business operates
- Your liability claims history
- Policy limits and deductibles
Bundle insurance policies to save money and increase security
If you run a small construction company or are an independent contractor, there are ways you can save on your business insurance. You may be able to bundle general liability coverage with commercial property insurance in a business owner’s policy (BOP). A BOP offers more complete coverage at a lower cost than purchasing each policy separately.
Businesses that are eligible for a BOP typically:
- Have fewer than 100 employees
- Have a small office or workplace
- Make less than $1 million in annual revenue
- Operate in a low-risk industry
- Need less than 12 months of business interruption insurance
A business owner's policy covers damage to your building and its contents, such as fires and storm damage. Businesses without a building can instead add business personal property (BPP) coverage to their general liability policy, or buy tools and equipment insurance to protect items brought to jobsites.
Talk to a licensed Insureon agent to find out if your construction business is eligible for a BOP.
View video transcript.
You know you need insurance for your small business, but where to start? And how can you keep costs down?
Insureon is here for you. You can get customized quotes from top carriers.
Most small businesses start with a general liability policy. You can combine property coverage with your liability insurance at a discount of $57 per month.
Maintaining a safe work environment can help you manage risk and lower your insurance costs too.
Get affordable insurance from the best carriers. Start your application now!
Insureon. Protection is peace of mind.
Other types of business insurance for construction companies and contractors to consider
While commercial general liability insurance covers basic construction industry risks, it does not offer absolute protection. Other policies to consider include:
- Workers’ compensation insurance: Workers’ comp covers medical costs for work-related injuries and illnesses. Most states require this coverage for businesses with employees.
- Commercial auto insurance: This policy covers the cost of an accident involving your business vehicle. Almost every state requires this coverage for business-owned vehicles.
- Business owner's policy: A BOP bundles general liability coverage with commercial property insurance at a discount. It includes coverage for fires, theft, and other losses at your building.
- Business personal property (BPP): This endorsement to your general liability policy covers items owned by your business that are kept at a designated location, though your business might not have a building.
- Contractor’s tools and equipment insurance: This form of inland marine insurance helps pay for the repair or replacement of a contractor’s tools and equipment if they are lost, stolen, or damaged in transit or at a jobsite. Construction contractors may also consider purchasing owners and contractors protective (OCP) liability insurance for full protection while completing projects.
- Professional liability insurance: Also called errors and omissions insurance (E&O), this policy covers professional mistakes and oversights, such as a contractor missing a deadline for a project.
- Surety bonds: These bonds reimburse your clients for financial losses if your company is unable to fulfill the terms of its contract.
- Builder’s risk insurance: Builder’s risk insurance can pay for damage done to a structure still under construction, such as a fire or vandalism at a construction site.
- Contractors pollution liability (CPL) insurance: This type of environmental insurance covers pollution liability risks for contractors and their subcontractors.
- Additional insured endorsement: This extends coverage to anyone other than the policyholder, and can be required by clients, contractors, and subcontractors depending on the project or contract.
- Railroad protective liability insurance: If you’re doing construction work near railroad tracks or crossings, then more than likely you’ll need this special type of liability insurance to protect the railroad company in the event of a lawsuit.
Get free quotes and buy online with Insureon
Are you ready to safeguard your construction or contracting business with a general liability insurance policy? Insureon helps contractors find insurance from top-rated insurance companies with one easy online application.
You can also speak with a dedicated Insureon insurance agent to learn which policies might suit your business best, as well as any exclusions you might face. Once you find the right policy, you can begin coverage and get a certificate of insurance in less than 24 hours.
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Updated: February 28, 2025
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