How much does general contractor insurance cost per month?

A general contractor with one to three employees typically pays $150 to $350 per month for a GL policy with $1M per occurrence and $2M aggregate limits. Larger crews, higher revenue, prior claims, and work on large commercial projects all push that number higher. Subcontractors with no employees and limited revenue can often find GL coverage starting at $80 to $120 per month.

Why is contractor insurance so expensive?

Contractors work in clients' homes and businesses, often with tools, ladders, open trenches, and live electrical or gas lines. The physical exposure to third-party property damage and bodily injury claims is genuinely higher than it is for a retail store or office business. Claims in construction and contracting also tend to be expensive when they happen. A water leak from faulty plumbing can damage flooring, drywall, and personal property across multiple floors. Carriers price for that exposure.

Do independent contractors need their own insurance?

Yes. An independent contractor working under a general contractor should carry their own general liability policy. The GC's policy does not typically cover the sub's own mistakes or property damage caused by the sub's work. Most GCs require subs to carry a minimum of $1M per occurrence before they are allowed on the job site, and they want to be listed as additional insured on the sub's policy.

What is tools and equipment insurance for contractors?

Tools and equipment coverage (also called inland marine insurance) covers tools, power equipment, and job-site materials when they are stolen, damaged in transit, or destroyed at a job site. Standard commercial property insurance typically only covers property at your listed business address. If your table saw is stolen from a job site or your tools are damaged in an accident on the way to a client, tools and equipment coverage pays for replacement.

How Much Does Contractor Insurance Cost? (General, HVAC, Electrical and More)

By Jessica Martinez, Contributing Writer, Business & Finance
Updated May 20, 2026

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A roofer with a clean record and under $400,000 in annual revenue might pay $3,500 to $5,000 per year just for general liability. That is before workers comp, before tools coverage, before a commercial vehicle enters the picture. For most trades, GL alone runs $80 to $300 per month, with the exact number driven by trade type, annual revenue, crew size, and claims history. Layer in workers compensation and tools and equipment coverage, and a two-person HVAC or electrical operation is looking at $400 to $900 per month in total insurance costs. General contractors managing subcontractors on larger commercial projects can pay $1,500 per month or more. The math adds up fast.

The Coverage Stack Contractors Typically Carry

Three coverages form the foundation for almost every contractor: general liability, workers compensation (required in most states the moment you hire an employee), and tools and equipment coverage. Certain trades and project types push that to four, adding a contractor's professional liability policy or an installation floater. Each one does something the others do not.

GL is the workhorse. It covers third-party bodily injury and property damage, so when a subcontractor gouges a client's hardwood floor or a ladder tips and takes out a bystander, it pays. Workers comp handles your employees' medical bills and lost wages when someone gets hurt on the job. Tools and equipment coverage, which insurers classify as inland marine, picks up what standard property insurance leaves out: tools and materials at job sites and in transit. The SBA's insurance guide for contractors is a solid first read for anyone mapping out their coverage needs from scratch.

GL Premiums by Trade Type

The underwriter's view of your trade matters more than almost anything else in pricing contractor GL. Roofing and demolition are consistently the most expensive trades to insure. Office-based general contractors who subcontract all physical labor land in the middle. Painting and drywall are lower-hazard compared to structural or mechanical work. These are realistic annual ranges for a sole proprietor or two-person operation:

General contractor (subcontracts labor): $1,500 to $4,000 per year. Revenue thresholds matter; underwriters typically want less than $500,000 in annual receipts for the lower end of this range.
Electrician: $1,800 to $5,500 per year. Electrical work carries shock and fire exposure. A licensed journeyman electrician with no claims history and under $400,000 in revenue will land on the lower end.
Plumber: $1,600 to $4,500 per year. Water damage from plumbing failures can be extensive. Claims history and whether the plumber works on residential or commercial projects affects pricing significantly.
HVAC contractor: $2,000 to $6,000 per year. HVAC work involves both electrical and refrigerant exposure. Commercial HVAC contractors working on large rooftop units pay more than residential service techs.
Roofer: $3,500 to $12,000 per year. Roofing is the highest-hazard trade in the contractor GL market. Fall risk, property damage exposure, and completed operations claims make it expensive to insure regardless of claims history.
Painter: $900 to $2,500 per year. Painting is among the lower-hazard trades. Spray painters working on commercial facilities pay more than residential brush-and-roller painters.

Workers Compensation Cost for Contractors

Workers comp is mandatory in most states from the moment you hire one employee. Premiums are calculated per $100 of payroll at rates that vary by classification code and state. A framing carpenter in California (class code 5645) runs roughly $20 to $28 per $100 of payroll; a crew with $300,000 in annual payroll generates a premium of $60,000 to $84,000. Electricians run lower, typically $8 to $14 per $100. Rates are set by the NCCI in most states. Use our workers comp cost calculator to estimate by trade and state.

Tools and Equipment Coverage: What It Costs and Why It Matters

Standard commercial property only covers business property at your listed address. Tools and equipment coverage (inland marine) fills the gap for everything that leaves the shop. Most small contractors carry $10,000 to $50,000 in coverage; annual premiums run $300 to $900 for a $25,000 policy. Some carriers exclude theft from vehicles unless tools are stored in a locked hard-sided toolbox, so read that exclusion before you buy. A single stolen set of power tools and a trailer can exceed $15,000 in replacement cost.

The Claims That Make Contractors Expensive to Insure

The work carries genuine risk of large, expensive claims. A roofing crew drops shingles onto a car: property damage and potential bodily injury. A plumber misinstalls a fitting, and a hotel leak destroys three floors before anyone notices: a completed operations claim that can run into six figures. An electrician's wiring error causes a fire: property damage plus the building owner's business interruption. None of that is exotic. Carriers price contractor GL to cover incidents that arise after the work is done and the invoice is paid, not just while the crew is on-site. That ongoing completed operations exposure is a real cost. The Insurance Information Institute details it specifically.

Contractor-Specific Endorsements Worth Knowing

Standard GL often excludes certain contractor exposures unless you add an endorsement. The common additions include:

Completed operations coverage: Usually included in standard GL, but verify the aggregate limit is adequate for your project size. General contractors on commercial projects sometimes need a separate completed operations tail policy.
Contractors pollution liability: Covers claims related to fuel, refrigerant, solvents, and other pollutants released during work. HVAC contractors handling refrigerants and contractors doing remediation work need this. Standard GL pollution exclusions can be broad.
Installation floater: Covers materials purchased for a specific job that are waiting to be installed. If a shipment of cabinets is stolen from a job site before installation, a general property policy will not cover it. An installation floater will.
Additional insured endorsements: General contractors require subs to add them as additional insureds. As a subcontractor, expect this request from every GC you work with. As a GC, require it from every sub you hire.

HVAC Contractor Insurance Cost Per Month

A sole-proprietor HVAC tech with no employees and under $200,000 in annual revenue typically pays $160 to $250 per month for GL alone, rising to $200 to $325 per month with tools and equipment coverage. A five-person company doing commercial HVAC work pays $600 to $1,200 per month across GL, workers comp, and equipment coverage, and more if refrigerant handling requires a contractors pollution liability endorsement.

How to Lower Your Contractor Insurance Premium

Claims history is the biggest lever, and you cannot rewrite it. Going forward, a documented safety program, requiring subs to carry their own GL, and accurate classification on your application all help. Misclassifying work to get a lower rate is insurance fraud and can result in denied claims. Shopping at renewal is worth the time; the contractor market reprices constantly, and an independent broker with contractor accounts will know which carriers are actively seeking your trade this quarter. For a broader look at what coverage trades typically need, see our guide to what business insurance you actually need.

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