How much does General Contractor Insurance cost? (2024)

General contractors and their subcontractors or workers are often exposed to much greater risks than any other profession. For them, having insurance is not only advisable but necessary.

The problem lies in knowing which insurances are better because they can vary depending on various conditions.

What are the insurances for general contractors and their prices?

General contractors must cover for any incident or inconvenience related to their company or workers. The insurances to be contracted are various, and their prices can vary significantly depending on the insurer.

It is possible to establish approximate prices by averaging the costs of various insurers. Due to the impossibility of establishing an exact price, because of the same variability depending on the insurer, an average serves to have a close idea.

There may be more coverage depending on the insurer. Those shown below are the most common and used by general contractors. You should call the company to find out the coverage of a specific insurer.

Workers’ Compensation Insurance

Workers’ compensation insurance is one of the most expensive on this list, averaging between $150 and $200 per month or $1,800 and $2,400 per month.
While some companies run cheaper rates of approximately $100 per month, others run much more expensive costs of $250 per month or more.

Regardless of which insurer it is, their high prices are not surprising because of how large their policies could be if required. Workers’ compensation insurance protects the worker’s health and finances.

The insurer covers the health expenses of an injured worker in the event of an injury, accident, or illness resulting from their work, whether it is an illness that develops over time, such as a back problem, or an accident.

General contractors’ workers’ compensation insurance helps cover all or at least a portion of a worker’s medical expenses under the above conditions.

This general contractor’s policy also covers two-thirds of workers’ wages when they must take time off due to work-related conditions or illnesses.

This is the only insurance on this list that is mandatory for a general contractor. The others are optional, and it is up to the contractor to decide whether to join them to enjoy all their benefits when needed.

General Liability Insurance

Liability insurance can be positioned with average prices between $100 and $150 per month, $1200 and $1800 per year, depending on your insurer’s coverages and rates.

In some insurers, you can get low prices of up to $80 per month, and in others, much higher prices of up to $200 per month. The coverage of this insurance can be very variable, and the same applies to the costs.

This type of coverage is responsible for responding totally or partially to the expenses arising from an injury or accident of clients or civilians within the construction site facilities or because of it.

It also covers if the damage is not caused by a person but by property not belonging to the general contractor’s company. For example, A wall falls during construction, and a person is injured. Therefore, the insurance must cover them.

This liability insurance also applies when the company is sued for those above. That is to say, in addition to covering medical expenses or repairs, it can also cover the costs of a lawsuit.

Considering all the risks represented by a structure under construction, especially if it is tall or large or in a busy place or with houses or businesses close, this is practically indispensable insurance for the general contractor.

Tools and Equipment Insurance

Tool and equipment insurance is one of the most specific insurances for general contractors and, simultaneously, one of the least expensive. Prices range from $10 to $20 per month. They can go up to $120 per year or $240.

Even for insurers where this coverage is more expensive or ranges up to a little more than $30 per month, it is still quite economical compared to other insurances.

It helps cover a minor or major portion of the repair or replacement of any tools, machinery, or materials and tools used during construction. It usually has coverage for when the items above are lost, damaged, or stolen.

Commercial Automobile Insurance

Commercial auto insurance is another of the most expensive major insurances for a general contractor. Its costs range from $150 to $200 per month or $1800 to $2400 per year.

In this case, we are talking about another insurance subject to the conditions where the company and the vehicles are located. That is to say when the place where the company carries out its activities has a high rate of vandalism; auto insurance becomes much more expensive.

The coverage for commercial automobiles is designed so that the insurance company will be responsible for the expenses incurred after an accident or collision of one of the company’s vehicles against another person or structure.

Depending on the policy, the insurance company may cover the expenses incurred by the collision or accident, both the company’s vehicle and the other vehicle, person, or property against whom the car struck if the driver is at fault.

Commercial Automobile Insurance covers medical expenses, structural repairs, or replacements to third parties or the general contractor’s company. They also usually have theft coverage.

The prices mentioned above may be higher, or lower depending on several factors, such as the year and make of the vehicle, whether it has a specific driver, and whether several cars belong to the company, or just one.