General liability insurance for contractors and construction companies is crucial as it safeguards their business from financial losses resulting from third-party claims of injury or property damage.

This type of coverage (contractor general liability insurance), or commercial liability insurance, protects against lawsuits arising from accidents or negligence during job site operations or at clients’ premises.

Contractors must understand that without general liability insurance cover, they could be held personally responsible for damages and legal fees, which may put them at risk of bankruptcy or even forced closure of their business.

Therefore, having a general liability insurance policy for contractors or contractor general liability insurance is vital for minimizing these risks and ensuring long-term success.

The liability insurance coverage includes incidents such as slips, trips, falls, defective workmanship, personal injury, advertising injury, and more.

With customizable general liability insurance for contractors available through reputable insurers, contractors should consider this essential investment before starting any new project.

This blog will discuss general contractors insurance, general liability coverage, and business liability insurance in detail. We will also discuss personal and advertising injury and general liability insurance cost.

What is General Liability Insurance?

General liability insurance is important for every type of contractor, no matter what field or industry they belong to.

Liability insurance for general contractors’ primary purpose is to provide coverage for accidents, injuries, or property damage that occurs during doing business. Since contractors operate in various settings, including clients’ homes and public spaces, they are exposed to many risks, making liability insurance indispensable.

The basic idea behind general liability insurance for contractors is that it protects them financially when they unintentionally cause harm or loss to others. Such situations can range from simple mishaps, such as breaking glass or causing water damage, to severe cases involving physical injury or death.

By purchasing appropriate contractor general liability insurance, contractors shield themselves from potentially catastrophic financial consequences.

General liability insurance covers and has provisions for legal representation in litigation. Legal costs alone can quickly become unaffordable for individuals needing more general contractors insurance protection.

Having adequate general liability insurance for contractors enables contractors to confidently pursue their livelihoods without fear of being overwhelmed by unexpected expenses.

What Things Does General Liability Insurance Cover?

What Things Does General Liability Insurance Cover

Contractors face numerous risks on the job, ranging from minor accidents to major disasters. Hence, if you take the contractor general liability insurance from an insurance company, it protects against

  • Bodily injury
  • Property damage and
  • Personal injury claims stemming from defamation or invasion of privacy allegations.

General contractors insurance policyholders usually pay annual premiums based on various risk factors like industry type, employee headcount, sales revenues, physical locations, and previous claim histories.

Here are typical examples of covered perils and associated losses in general liability insurance for contractors:
General liability for contractors generally covers:

Slip, Trip & Fall Accidents

Liability insurance for general contractors provides financial assistance if visitors sue after falling on slippery floors, cracked sidewalks, poor lighting, or unmarked hazards within company properties or job sites.

Product Defects or Malfunctions

Monetary relief when customers allege defects causing bodily harm or product failures leading to property damages. This extends to items manufactured by others but sold or distributed by policyholders.

Property Damage

Reimbursement for repairing accidental destruction or defacements of external structures, fixtures, landscaping, or belongings belonging to others. For example, damaged fences, walls, windows, doors, furniture, equipment, etc., caused by negligent acts or omissions while performing services.

Personal and Advertising Injury

Legal expenses and compensatory damages for libel, slander, copyright infringement, invasion of privacy, false arrest, discrimination, or wrongful eviction allegations stemming from published materials, statements, or advertisements are covered in liability insurance for general contractors.

Fire Legal Liability

Fires sparked by policyholder actions burning neighboring buildings or their contents may result in separate “legal” damages distinct from direct physical damages. These indirect harms frequently exceed initial fire cleanup costs.

Medical Payments

Limited sums are paid out directly to individuals suffering minor cuts, bruises, broken bones, sprains, burns, or electric shocks on premises without requiring formal lawsuits.

The list could go on for general liability for contractors.

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What Types Of Contractors Need General Liability Insurance Policy?

What Types Of Contractors Need General Liability Insurance Policy

Most contract work forms require General Liability Insurance to perform services legally.

Typically, the following categories of contractors have this requirement either imposed upon them through state regulations or demanded by customers before commencing any project.

To avoid penalties or reputational damage, review each relevant state’s guidelines thoroughly to ensure compliance regarding required minimums and additional restrictions:

Construction Contractors:

  • Building contractors
  • Roofing contractors
  • Electricians
  • HVAC technicians

Service Contractors:

  • Landscapers
  • Janitorial Services
  • Pest Control Operators

Specialty Tradespeople:

  • Plumbers
  • Carpenters
  • Stonemasons

Repair & Maintenance Workers:

  • Handymen
  • Appliance repair persons


  • Independent contractors hired directly by a primary contractor

How Much Does General Liability Insurance For Contractors Cost?

How Much Does General Liability Insurance For Contractors Cost

General liability insurance costs are based on various factors unique to each business. For construction businesses, some examples are:

  • Type of industry/business owned
  • Business experience
  • Number of employees
  • Location
  • Policy details such as coverage limits and deductibles
  • Claims history

The cost of general liability for contractors depends on the type of insurance; if you are going for liability insurance for general contractors, commercial auto insurance, professional liability coverage, omissions insurance, workers’ compensation, or any other insurance, the price would be different.

General liability insurance for contractors and construction firms typically costs $69 monthly. The actual cost can fluctuate due to distinctive elements particular to individual businesses and financial protection.

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Additional Business Insurance for Contractors

There are several types of additional business insurance that contractors should consider beyond general liability protection. Here are some common ones:

1. Professional Liability Insurance

Protects contractors from financial losses arising from errors or oversights in their professional advice, designs, recommendations, or services. Coverage extends to third-party clients, partners, subcontractors, or vendors claiming harmful consequences due to contractual neglect or faulty workmanship.

2. Commercial Auto Insurance

Provides coverage for bodily injuries, property damage, medical expenses, and attorney fees when company-owned or leased autos cause accidents or collisions during project execution. Additionally, non-owned and hired vehicle usage and personal automobile operation for work purposes may require supplementary personal auto insurance endorsements.

3. Property Insurance

Safeguards contractor premises, equipment, supplies, completed jobs, and stored materials against unforeseen hazards like fires, storms, floods, burglaries, explosions, earthquakes, landslides, sinkholes, or structural collapses. Some policies include building ordinances and code upgrade coverage for post-disaster reconstruction compliance updates.

4. Workers Compensation Insurance

Mandated by state laws for most employers, this coverage pays for injured worker’s medical treatment, recovery costs, disability benefits, and death benefits. Ensuring employees receive prompt and appropriate care reduces litigious actions and minimizes long-term liabilities.

5. Bond Insurance

Guarantees successful project conclusion through three primary classes of contract sureties. Bid bonds assure competitive tender submission accuracy; performance bonds promise acceptable task fulfillment; and payment bonds warrant material supplier, laborer, and subcontractor monetary settlement upon satisfactory work completion.

6. Cyber Liability Insurance

Addresses electronic threats targeting sensitive client, project, or firm data via network intrusions, phishing scams, ransomware attacks, malicious software installation, penalties, fines, and legal defense fees related to HIPAA violations, privacy breaches, information disclosures, and unauthorized access attempts get addressed under HHS/OCR enforcement actions, class action suits, and individual complaints.

7. Umbrella Liability Insurance

An excess liability policy providing added protection over existing coverages, umbrella insurance is beneficial for high-risk operations or individuals with significant personal assets worth defending.

8. Disability Income Insurance

This insurance replaces lost income for proprietors or critical team members who cannot work due to illness, injury, or accidental disability.

9. Health Insurance

By offering themselves and their staff health benefits, contractors demonstrate their commitment to employee wellbeing while potentially reducing tax burdens and attracting top talent.

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Jayanti Katariya
Jayanti Katariya About the author

Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.