Construction Insurance: What Contractors Need to Know Before Starting a Job

Why Construction Insurance Is Non-Negotiable

Construction is one of the most heavily regulated industries when it comes to insurance. General contractors, subcontractors, and specialty trades must carry proper coverage to get licensed, sign contracts, and protect their business from the financial consequences of accidents, lawsuits, and property damage.

Core Coverages Every Contractor Needs

1. General Liability Insurance

This is the foundation of any contractor's insurance portfolio. GL covers bodily injury and property damage claims caused by your work. Most GCs and project owners require a minimum of $1M per occurrence / $2M aggregate before you step on their job site.

2. Workers' Compensation

Required in nearly every state once you hire employees. Workers' comp covers medical bills and lost wages if an employee is injured on the job — and it protects you from being personally sued by an injured worker.

3. Commercial Auto Insurance

Your personal auto policy does NOT cover vehicles used for business purposes. If you're driving to job sites, hauling materials, or transporting equipment in a company truck, you need commercial auto coverage.

4. Builder's Risk Insurance

Builder's risk (also called course of construction insurance) covers a building under construction against damage from fire, theft, vandalism, and weather. It's typically required on any project where you're the general contractor.

5. Tools and Equipment Coverage

Inland marine insurance covers your tools, equipment, and machinery while they're in transit or stored on a job site. One theft from a job site can cost tens of thousands of dollars.

Additional Coverage for Specialty Contractors

• Pollution liability — Required for contractors working with hazardous materials
• Professional liability (E&O) — For design-build contractors
• Umbrella insurance — Extends your liability limits beyond your primary policies

Certificate of Insurance (COI): What You Need to Know

A Certificate of Insurance is a one-page summary of your coverage that you'll need to provide to every GC, property owner, or client you work with. InsuranceBind can issue same-day COIs so you never hold up a job because of paperwork.

Learn more about construction insurance or get a free contractor quote today.