How Much Is General Contractor Insurance Cost? 2026 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.

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

Business Owner’s Policy (BOP)

General contractors who want bundled protection often choose a Business Owner’s Policy, which combines general liability coverage with commercial property insurance. This package helps safeguard against client injury claims, damage to customer property, and loss or destruction of tools, office contents, or storage units.

For example, if a fire breaks out in your equipment warehouse and destroys power tools, ladders, and materials, a BOP can help cover replacement costs and repairs. Many contractors add optional coverage for equipment breakdown or business income loss.

Average cost: about $100 per month
Typical liability limits: $1 million per occurrence and $2 million aggregate, with separate property limits based on insured value

Cost drivers include:

• Total value of tools, supplies, storage units, or office space
• Location crime or weather exposure
• Revenue and number of employees
• Whether you add endorsements like business interruption

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.

General Liability Insurance

General liability is the coverage most general contractors purchase first because it protects against third-party injury and property damage claims that occur during a project. If a visitor trips over construction materials, or debris damages a client’s flooring, this coverage helps pay medical bills, repair costs, and legal defense.

Average cost: about $80 per month
Typical limits: $1 million per occurrence and $2 million aggregate

Pricing is influenced by:

• Type and size of construction projects
• State and local risk environment
• Number of active job sites
• Claims history
• Whether you perform higher-risk trades like roofing or demolition

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

Commercial Auto Insurance

General contractors often rely on trucks, vans, trailers, or work vehicles to transport crews, tools, and materials. Commercial auto insurance protects those vehicles against accidents, theft, vandalism, and third-party damage.

If a crew member rear-ends another driver while heading to a job site, commercial auto coverage helps pay for repairs and injury claims. Some contractors also add hired and non-owned auto insurance when employees use personal vehicles for work tasks.

Average cost: about $170 per month
Common limit: around $1 million combined single limit

Cost factors include:

• Number of vehicles and their value
• Driving records of employees
• Mileage and service areas
• Use of trailers or heavy equipment transport

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.

Workers’ Compensation Insurance

Workers compensation insurance covers employees who are injured on the job, paying for medical care, disability benefits, and lost wages. Construction work involves ladders, heavy lifting, power tools, and elevated fall risks, so premiums for general contractors tend to be higher than many other industries.

Average cost: around $250 per month

Premiums are influenced by:

• Payroll size
• Job classifications (roofing vs carpentry vs general labor)
• Accident history
• Safety procedures

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

Contractor’s Tools And Equipment Insurance

General contractors depend on tools and equipment such as saws, generators, compressors, nailers, scaffolding, and laser levels. Tools and equipment insurance covers theft, loss, or damage whether items are stored, transported, or on a job site.

Average cost: about $15 per month

Rates depend on:

• Total tool value
• Storage and security practices
• Frequency of job site movement
• Number of workers using equipment

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.

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.

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.