Construcción

General Liability Insurance for Construction Contractors: What It Covers and What It Costs

If you're working as a self-employed contractor — electrician, plumber, remodeler, carpenter — and something goes wrong on a job site, you're financially responsible. A broken water line that floods a basement. A ladder that falls and injures a homeowner. A fire caused by faulty wiring. Without insurance, that liability lands on your personal assets.

General liability insurance is the core coverage that protects you. Here's how it works, what it covers, and what it actually costs.

What general liability insurance covers

Third-party bodily injury

If someone other than you or your employees is injured as a result of your work or operations, general liability pays for their medical costs, lost wages, and any damages you're legally liable for. Examples:

A homeowner trips over your tools and breaks their wrist.
A neighbor is injured by falling debris from your worksite.
A child is burned by exposed wiring you were working on.

Third-party property damage

If you damage property that belongs to someone else during your work, general liability covers the cost to repair or replace it:

You accidentally drill through a water pipe and flood the floor below.
You drop a heavy tool and crack the homeowner's hardwood floor.
You scratch or damage a client's new appliances while installing adjacent cabinetry.

Completed operations coverage

This covers damage or injury that occurs after you've finished the job — when someone discovers that work you completed has caused a problem:

A roof repair you did last spring leaks during a storm.
An electrical panel you installed later causes a short circuit.
Tile you set comes loose and someone is injured.

Completed operations coverage is included in most standard general liability policies.

Products liability

If you supply or install a product that causes harm, this coverage applies. Important for contractors who source and install materials.

What general liability does NOT cover

Your own tools and equipment: those require inland marine/tools and equipment coverage.
Your own bodily injury or illness: get occupational accident insurance or a disability policy.
Your employees' injuries: covered by workers' compensation, which is typically required by law if you have employees.
Intentional damage.
Professional errors or faulty workmanship alone (without resulting damage — most GL policies don't cover a general "bad job" claim unless there's property damage or injury resulting from it).
Vehicles: your commercial auto policy covers vehicle-related incidents.

How much coverage do you need?

Standard policy structure:

Per-occurrence limit: maximum the insurer pays for a single incident.
Aggregate limit: maximum the insurer pays in total across all claims in the policy period.

Common minimum requirements:

Most GCs and commercial projects: $1 million per occurrence / $2 million aggregate.
Residential remodeling for homeowners: $500,000 per occurrence is sometimes acceptable, but $1M/$2M is increasingly standard.
High-value residential or commercial projects: $2M/$4M or higher, sometimes with an umbrella policy on top.

When in doubt, go with $1M/$2M. The difference in premium between $500K and $1M limits is usually minimal.

What does it cost?

Premiums depend on:

Trade/specialty: electricians and plumbers typically pay more than painters due to higher risk.
Annual revenue: more work = more exposure = higher premium.
Number of employees: sole proprietors pay less.
Claims history: prior claims increase your premium.
State: premiums vary by state.

Approximate annual premiums for sole proprietors:

Trade	Annual revenue	Annual premium
Painter / drywall	Under $75K	$600–$900
Carpenter / finish work	Under $75K	$700–$1,100
Electrician	Under $75K	$900–$1,400
Plumber	Under $75K	$900–$1,500
General contractor/remodeler	Under $100K	$1,000–$2,000
General contractor/remodeler	$100K–$300K	$1,500–$3,500

These are estimates. Get quotes from at least three providers.

Additional coverages to consider

Inland marine / tools and equipment: covers your tools and equipment if they're stolen from a job site or your truck, or damaged. Often sold as a rider on your GL policy or separately. Worth it if you have significant tool investments.

Commercial auto: if you use a vehicle for work purposes, your personal auto policy likely does not cover business use. A commercial auto policy is separate and covers vehicles used for hauling, driving to job sites, and transporting tools.

Workers' compensation: required by law in most states if you have employees. Even with a single part-time employee. Sole proprietors generally can exempt themselves but consider occupational accident coverage as an alternative.

Umbrella policy: provides additional coverage above your underlying policies. A $1M umbrella on top of a $1M GL policy is often inexpensive ($200–$400/year) and provides meaningful extra protection.

How to get it and what to expect

Where to buy:

National insurers: Travelers, The Hartford, Nationwide, Markel.
Specialty construction insurers: Next Insurance, Thimble (digital-first, monthly billing option).
Local independent insurance agents: often get access to multiple markets.
Trade associations: some associations have negotiated group rates for members.

What to have ready for a quote:

Your gross annual revenue (current or projected).
Number of employees and subcontractors.
Types of work you do.
Prior claims history (3–5 years).
Your contractor's license number.

Certificate of insurance: once you have a policy, get certificates. You'll need to provide them to general contractors, commercial clients, and homeowners who ask. Any professional client will ask for one before you set foot on site.

Why it matters beyond legal protection

Carrying insurance and being able to provide a certificate signals to clients that you're a serious professional. Uninsured contractors may be cheaper, but clients who've been burned know the risk. Having proof of insurance is increasingly a factor in winning bids — especially for repeat clients and referrals.