How Much Is General Contractor Insurance Cost? 2025 Rates

U.S. general contractors can expect to pay between $3,000 and $10,000 annually for comprehensive business insurance, averaging $250 to $830 per month. The primary cost drivers are your location, coverage limits, number of employees, the type of policy, type of construction work, annual revenue, equipment and tools value, and subcontractor usage.

How Much Does General Contractor Insurance Cost?

The average general contractor in the U.S. pays between $3,000 and $10,000 per year for a full business insurance package. That breaks down to roughly $250 to $830 per month. However, this is just a ballpark range and actual costs of business insurance can vary widely depending on your specific situation.

Every general contractor business is different, so insurance costs aren’t the same for everyone. A small contractor who does basic home repairs will pay much less for insurance than a large company working on big commercial buildings. The kind of work you do, the size of your team, the tools and equipment you use, and where you’re located all affect how much you’ll pay.

For example, a contractor who only does painting and drywall in small homes will have fewer risks and lower insurance costs. But a contractor building large structures or doing electrical work in a busy city might pay more. That’s because the chances of accidents, property damage, or lawsuits are higher.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Type of construction work (affects liability and risk profile)
• Annual revenue (used to calculate liability premiums)
• Equipment and tools value (affects inland marine and property coverage)
• Subcontractor usage (affects liability and additional insured requirements)

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your business.

Average General Contractor Insurance Costs For Coverage Types

When it comes to protecting your general contractor business, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan.

Here’s a closer look at the major coverages most general contractors need.

• General liability insurance: $80 per month
• Business owner’s policy: $100 per month
• Workers’ compensation insurance: $250 per month
• Commercial auto insurance: $170 per month
• Builder’s risk insurance: $100 per month
• Contractor’s tools and equipment: $15 per month

General Liability Insurance

The average cost of general liability insurance for a general contractor is about $80 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, if a third party is injured at a job site, like a visitor tripping over construction materials, this policy would help pay for their medical expenses and your legal defense costs.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the size and scope of your projects, geographic location, number of job sites, past claims history, and whether high-risk work such as roofing or demolition is performed.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are approximate annual premiums tailored to general contractor operations in each state based on typical market pricing; actual premiums will vary with revenue, project types, limits selected, claims history, and other state-specific factors

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $100 per month for a general contractor business.

A Business Owner’s Policy (BOP) combines general liability insurance and commercial property insurance into one package. It helps protect your business if someone gets hurt on the job site, if you damage someone’s property, or if your tools, equipment, or office space are damaged or stolen.

For example, if a fire breaks out in your storage unit and destroys your tools and equipment, the BOP can help pay to replace them and repair the damage.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

The cost of a BOP depends on things like the value of your tools and property, where your business is located (especially if it’s in a high-risk area for crime or natural disasters), how much money your business makes, how many employees you have, and whether you add extra coverage like business interruption or equipment breakdown.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates reflect typical annual BOP premiums for general contractor operations in each state; actual premiums will vary with business size, revenue, location, coverage limits, claims history, and other risk factors.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a general contractor is around $250 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a construction worker falls from a ladder and breaks their leg, workers’ comp would help pay for their hospital treatment and cover part of their lost wages while they heal.

Each state sets its own rules, but most policies cover all medical expenses and a portion of lost wages, usually without a maximum limit.

The cost of workers’ comp depends on your total payroll, the kind of work your employees do (like roofing, carpentry, or electrical), your past claims history, and whether you have safety programs in place to reduce accidents.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are approximate annual premiums tailored to general contractor operations in each state and reflect typical market rates; actual premiums will vary based on payroll, classification codes, claims history, safety programs, and state-specific rules

Commercial Auto Insurance

The average cost of commercial auto insurance for a general contractor is about $170 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if one of your crew members crashes a company pickup truck on the way to a job site, this insurance would help cover the repair costs and any injuries or property damage caused to others.

Most commercial auto policies have a coverage limit around $1 million that applies to both injuries and property damage in a single accident.

The cost of this insurance depends on how many vehicles you have, what kind they are (trucks, vans, trailers), how often they’re used, your employees’ driving records, whether they drive locally or long distances, and if you need extra coverage like hired and non-owned auto insurance (HNOA) for workers using their own vehicles on the job.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are approximate annual premiums for commercial auto coverage tailored to general contractor operations in each state; actual premiums will vary with fleet size, vehicle types, driving records, revenue, coverage limits, and other risk factors.

Builder’s Risk Insurance

The average cost of builder’s risk insurance for a general contractor is about $100 per month.

Builder’s risk insurance is a type of property insurance that protects a construction project while it’s being built or renovated. It covers damage to the building, materials, and equipment while construction is underway.

For example, if a storm causes damage to a building under construction, such as roof damage or structural issues, builder’s risk insurance would help cover the cost of repairs. Similarly, if construction materials like lumber or bricks are stolen from the job site, this policy can help replace them.

This insurance is usually purchased by general contractors, property owners, or developers, and it can be required as part of a construction contract.

The cost of builder’s risk insurance is based on how much the building project is worth, including the cost of materials and the work being done to build it.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates reflect market-average annual builder’s risk premiums tailored to general contractor projects in each state; actual premiums will vary with project value, location, duration, construction type, optional coverages, and insurer underwriting.

Contractor’s Tools And Equipment Insurance

The average cost of contractor’s tools and equipment insurance for a general contractor is about $15 per month.

Contractor’s Tools and Equipment Insurance is a type of coverage that protects the tools and equipment a contractor uses to do their work. This insurance covers damage, theft, or loss of your tools and equipment, whether they are on a job site or being transported between locations.

For example, if a contractor’s drill or saw is stolen from their work truck overnight, this insurance would help pay to replace those items.

This type of coverage is especially useful for contractors who rely heavily on their tools and equipment to complete their work and cannot afford the cost of replacing them out-of-pocket.

The cost of this insurance depends on the value of the tools and equipment, how often they are used, and how many items are covered under the policy.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are approximate annual premiums tailored to general contractor tools and equipment coverage in each state; actual premiums will vary with total insured value, business size, claims history, storage and security practices, and other underwriting factors.

You might also consider adding surety bonds, which guarantee completion of a job, depending on the size and scope of your business.

General Contractor Business Insurance Costs By Provider

General contractor business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: Estimates are based on industry average annual premiums for general contractors and typical coverage mixes; actual premiums will vary by location, revenue, subcontractor use, payroll, claim history, and coverage limits

What Factors Impact General Contractor Insurance Costs?

Contractor insurance premiums are carefully calculated by underwriters based on your business’s risk profile. From the type of construction work you do to your job site locations and claims history, several factors affect how much you’ll pay for coverage.

Location

Where you work plays a big role in your insurance cost as a general contractor. Working in areas with high foot traffic or high crime rates, for example, might increase the risk of injuries or stolen equipment.

If your job sites are in areas with high crime, flooding, or storm risk, your premiums will likely be higher. Working in safer, low-risk areas may help lower your insurance rates.

Experience

Your experience as a general contractor plays a role; the longer you work in the field, the lower your premiums are likely to be owing to that experience.

Coverage Limits & Deductibles

Higher policy limits offer more protection, but they also increase your premium. Choosing a higher deductible can reduce your monthly cost, but you’ll pay more out of pocket if you file a claim.

Number Of Employees

The more workers you have, the higher the chance of workplace injuries. This means higher costs for workers’ compensation and liability insurance. Also, the type of work your employees do, such as roofing vs. general labor, affects your rates.

Type Of Policy

Different types of coverage cost different amounts. A general liability policy is usually cheaper than a Business Owner’s Policy (BOP), which also includes property coverage. Adding builder’s risk, commercial auto, or tool insurance increases the total premium.

Claims History

Your background plays a role in your costs; if you have a history of claims against you or your company, particularly for negligence or injury, it can remain on your record for years, leading to higher premiums.

Type Of Construction Work

Not all construction work carries the same risk. High-risk services involving heights, heavy machinery, or demolition cost more to insure than lower-risk tasks like drywall, painting, or remodeling. Similarly, if you perform work on commercial properties, your risks are higher than work on residential properties.

Annual Revenue

Higher business income often leads to higher premiums. That’s because insurance companies assume that more jobs mean more risk exposure, especially on active job sites.

Equipment & Tools Value

As a general contractor, your insurance needs will change based on the equipment you use. Things that you use more frequently are also more likely to get damaged or stolen compared to things you use infrequently.

If you use expensive tools, heavy machinery, or specialized equipment, you’ll need more coverage to protect them from theft or damage. The more valuable your gear, the more your tool and equipment insurance will cost.

Subcontractor Usage

If you hire subcontractors often, it can raise your risk, especially if they aren’t properly insured. The more employees or subcontractors you have, the higher the risk of injury or damage. Some policies require you to list subcontractors or add them as “additional insured,” which can affect your premiums.

Insurance Provider

Different insurance companies offer different rates and options for contractors. Some specialize in construction risks and may offer better deals or custom packages. Getting quotes from multiple insurers can help you find the best price and coverage.

How To Lower A General Contractor’s Insurance Costs

Running a contracting business comes with a lot of costs, but your insurance bill doesn’t have to be one of the biggest. While you can’t skip coverage, you can take smart steps to lower your premiums without cutting back on protection. Here are some practical ways general contractors can reduce their insurance costs:

1. Bundle Your General Contractor Policies

One easy way to save money on general contractor insurance is by bundling your policies. Many insurance companies offer a Business Owner’s Policy (BOP) that combines general liability and property insurance for a lower price than buying them separately. If you also need workers’ compensation or commercial auto insurance, getting everything from the same provider can lead to even more discounts. Bundling makes your insurance simpler to manage and more affordable overall.

Tip: Consider paying a higher deductible too, even on a BOP. As a general contractor, increasing your deductible by $5,000 can reduce premiums by an average of 28%. Having more cash revenue on hand for deductibles can mean saving much more long term. 

2. Ask About Discounts

Insurance companies often give better rates to contractors who stick with a policy long-term. Ask your provider if they offer discounts for signing a two- or three-year agreement instead of renewing every year.

3. Pay Annual Premiums for General Contractor Insurance

Each time you make a monthly payment on your insurance, it comes with a processing fee, upwards of 10%. This means you can save hundreds if you pay annually instead.

Consider this: If your policy is $20,000, and you pay annually, you can save up to $2,000 per year on processing fees.

4. Implement Safety Measures

Accidents on the job site can cost you and your insurance company a lot of money. Taking steps to keep your sites safe can help lower your insurance premiums over time. For example, keeping work areas clean and organized, using proper safety gear, marking hazardous zones, and regularly inspecting tools and equipment can reduce the risk of injuries to both workers and visitors, and may help lower your general liability and workers’ comp costs.

5. Create A Safe Working Environment

A strong safety program can help lower your workers’ compensation insurance costs. This means training your crew on proper lifting techniques, safe equipment use, fall prevention, and what to do in emergencies. When your team knows how to avoid accidents, there are fewer injuries and fewer insurance claims. That can lead to lower premiums over time.

Tip: If at any point you implement new safety measures or certification requirements, check your insurance to see about new discounts too.