General Contractor Insurance

If you're a general contractor, you've likely got a heavy load on your shoulders. Whether you're building houses or football stadiums, you've got many subcontractors working for you, and they, in turn, may have subcontractors working for them. Each subcontractor has a specialty, from plumbing to roofing and beyond. So with all this activity, you need sturdy general contractor insurance to protect yourself against financial losses. 

The good news is an independent insurance agent can easily help you get set up with the right general contractor insurance. They'll get you matched to a policy that includes all the coverage you need most. But up first, here's a deep dive into general contractor liability insurance and why it matters.

General Contractor Liability Insurance

Insurance for general contractors starts with business liability coverage. This essential coverage provides protection against third-party claims of property damage or bodily injury and pays for the costs of medical care, property repair, or replacement. It covers legal defense costs if someone sues you for personal property damage or bodily injury.

On a busy construction site, the list of things that could go wrong is almost never-ending. Imagine you've built an apartment building that has leaks in many of the units or the wrong flooring. General liability insurance for contractors doesn't cover improperly executed job duties, but it does cover accidents. With so many workers involved in projects involving heavy equipment, ladders, and great heights, you need contractor general liability insurance in case someone gets injured. 

Here are some of the most common causes of construction site injuries:

• Falls from heights 
• Falling objects, such as tools or heavy equipment, that hit workers or passersby
• Trenching accidents in which dirt caves in on someone
• Electrocution due to exposure to high voltage overhead or underground power lines, or faulty power tools
• Chemical injuries
• Exertion injuries
• Fire and explosion injuries

Although subcontractors have their own general contractor liability insurance, someone who sues will likely sue all parties involved. The courts hold the general contractor, as the overall manager, ultimately responsible. You might have an indemnification agreement with a sub, but agreements aren't always honored. That's why having your own liability coverage is critical.

Workers' Compensation for Contractors

Contractor insurance isn't complete without workers' compensation. Most states require this insurance to cover employee on-the-job injuries, illnesses, and resulting deaths. Coverage pays for the costs of medical treatment, lost wages for injured or ill employees, and funeral costs. Ensure that every subcontractor working under you has enough workers' comp protection. 

Commercial Property and Builders Risk Insurance for Contractors

Contractors need builders risk insurance to cover incidents that can occur during construction and components that will be part of the structure. If a pallet of shingles sitting outside gets damaged or stolen while the project is underway, builders risk insurance can help reimburse you for the materials. You're also covered for damage to a building under construction for the value of the structure at the time of the incident.

General contractor insurance also must include commercial property insurance, which can cover damage to, or destruction or theft of, your office space or physical buildings, inventory, and materials used for job duties. However, you'll need inland marine insurance to protect your equipment for materials used for the job that must be transported between job sites.

How Much Is General Contractor Insurance?

Insurance for general contractors is quite expensive compared to coverage for many other occupations. Contractor general liability rates are higher because you're responsible for all subcontractors and their employees. Plus, construction is an inherently dangerous occupation, and insurance companies compensate for this increased risk with higher premiums. Liability rates vary depending on the scale and complexity of your projects. 

Other factors that affect liability rates include the size and number of buildings under construction and the payroll of any subcontractors involved with the project. Builders risk insurance costs also vary depending on the scale of the project. Special policies are available for specific types of projects. An independent insurance agent can obtain general contractor insurance quotes from multiple local companies and get you the best overall rate.

Commercial Contractor Insurance Costs

Policies are different for small vs. large commercial contractors. Sometimes, for large projects or those that might take more than a year to complete, a contractor must purchase commercial contractor insurance, including liability and builders risk coverage, that covers all subcontractors. This is often done for large commercial projects like school buildings or football stadiums.

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Residential Contractor Insurance Costs

Residential contractors also have varying insurance costs. Different policies exist for contractors who build one house and those who build a development or multiple housing units. Residential contractor insurance premiums vary based on the size and value of your project and the number of subcontractors involved. As always, an independent insurance agent can help you obtain exact quotes for this type of coverage in your area. 

Why Work with an Independent Insurance Agent?

A local independent insurance agent can obtain general contractor insurance quotes, whatever the size or scope of your project. These agents can shop and compare quotes from many different local carriers for you. They'll ultimately get you matched to a policy and insurance company that offers you the overall best blend of coverage and cost.