Construction worker measuring a building exterior.

Construction Insurance

What kind of work do you do?
Choose from the nation's best insurance providers
Logos of Insureon's partners.

Top insurance policies for construction and installation businesses

Business insurance can help pay for lawsuits, injuries, damaged materials, and theft. Small construction businesses often buy the following insurance policies to protect against common risks.

General liability insurance

General liability insurance icon

A general liability policy protects construction contractors against legal costs related to client property damage and injuries. It's often required by commercial leases and contracts.

  • Client bodily injuries
  • Accidental damage to a client's property
  • Defamation and copyright lawsuits

Business owner's policy

Business owner’s policy icon

Construction businesses and contractors can save money with a business owner's policy, or BOP. It includes both general liability coverage and commercial property insurance at a discount.

  • Slip-and-fall injuries
  • Accidental damage to a client's property
  • Theft and vandalism

Workers' comp insurance

Workers’ compensation insurance icon

Businesses with employees are usually required to carry this policy to cover workplace injuries. In some states, even sole proprietors who work in construction must carry this coverage.

  • Medical bills for injured workers
  • Disability benefits
  • Lawsuits from workplace accidents

Commercial auto insurance

Commercial auto insurance icon

Construction vehicles must carry this coverage to comply with state laws. It helps pay for financial losses in an accident, including legal costs and property repairs.

  • Auto accident injuries
  • Auto accident property damage
  • Theft of a construction vehicle

Contractor's tools and equipment

Contractor’s tools and equipment coverage icon

A type of inland marine insurance, this policy protects your tools and equipment wherever you bring them. That includes items in transit, stored off-site, or used at a job site.

  • Newer tools and equipment
  • Items valued at under $10,000
  • Tools that travel to construction projects

Professional liability insurance

Professional liability insurance icon

This policy helps construction companies pay for legal costs related to a mistake, missed deadline, or other accusation of professional negligence. It's also called errors and omissions insurance (E&O).

  • Project delays and budget overruns
  • Wrong materials and other mistakes
  • Breach of contract

How much does construction insurance cost?

A construction contractor calculating insurance costs.

From our customer data, here's a quick look at the average costs of common construction insurance policies:

General liability: $80 per month
Business owner's policy (BOP): $98 per month
Workers' compensation: $254 per month

Factors that can influence your premiums include:

  • Industry risks
  • Number of employees
  • Types of insurance purchased
  • Deductibles and other coverage options
  • Claims history
View Costs

How do I get construction contractor insurance?

TechInsurance helps you get insured quickly so you can secure contracts, comply with state laws, and protect your business against costly lawsuits and accidents. We work only with top-rated carriers to secure the best possible construction insurance coverage for your business.

You can get the right insurance in three simple steps:

Our licensed insurance agents know the construction industry and will help make sure you get the right coverage at an affordable price. Gain peace of mind with advice from expert agents and policies from the leading carriers in the nation.

Verified business insurance reviews

Hear from customers like you who purchased small business insurance.

Common questions about construction business insurance

Find answers to your questions about construction insurance.

What other types of coverage do construction contractors need?

Depending on the work you do, you may need additional types of construction insurance. A complete risk management plan for a construction project might include:

  • Builder's risk insurance: Also called course of construction insurance, this policy helps pay for damage to a structure in progress and construction materials.
  • Contractors pollution liability insurance (CPL): This policy protects contractors against legal costs related to pollution, such as a lawsuit about excessive dust raised at your construction site.
  • Inland marine insurance: Commercial property insurance only covers items at your business address, so you may need inland marine insurance for items in transit or at a job site. Coverages include contractor's tools and equipment insurance and installation floater insurance for materials awaiting installation.
  • Commercial umbrella insurance: When your underlying general liability, commercial auto, or employer's liability policy reaches the limit on a claim, umbrella insurance activates to provide additional coverage.
  • Mobile equipment endorsement: This type of coverage insures tractors, backhoes, and other construction vehicles not covered by standard auto insurance.

Does my contracting business need a license, permit, or bond?

The requirements for licenses, permits, and bonds depend on the type of work you do and the laws in your state. For example:

  • You may need a license to do certain types of work, such as plumbing, roofing, or electrical work. General contractors also typically need a license. These requirements vary by state.
  • You might need a permit for a specific project. For example, building a structure of a certain height, or converting one type of room into another, could require a permit. Again, this depends on your state laws.
  • Bonds help you secure contracts. Several types of surety bonds are common in construction, including bid bonds, performance bonds, and payment bonds. They act as a guarantee that you'll fulfill the terms of a contract. You may need one to bid on a project, apply for a license, or work with a specific client.

In many cases, your insurance needs are determined by licenses, permits, and bonds. For example, general contractors often need to buy commercial general liability insurance in order to get licensed in their state.

Whose responsibility is it to insure a building site?

Anyone involved with a project can secure insurance for a building site. That might be the property owner, the developer, the project owner, or the business that's been hired to do the work.

If someone else bought the policy, you need to make sure your business's name is on it. Otherwise, you could end up facing expensive legal bills from an accident or mistake. Ask the policyholder to include your business on their policy as an additional insured.

If you bought the policy, you can add independent contractors, subcontractors, and others so they also benefit from the coverage. Every person who could be held liable should have financial protection from construction risks.

Why is it important to keep continuous construction business insurance?

Buying insurance only when you need it may seem like a good idea. However, there are several reasons you should maintain continuous coverage:

  • Insurers increases their rates when you start and stop coverage. Insurance companies like consistency. If you cancel a policy, they might be unwilling to sell you another policy, or decide to charge more for the same coverage.
  • Some policies won't provide coverage for a project after you cancel them. Claims-made policies, such as professional liability insurance, only cover claims made while the policy is active. If you're sued for a completed project after you've canceled coverage, you won't be covered—even if you were insured while you did the work.
  • You could lose your license. Some professional licenses require insurance, which means you're at risk of losing your license if you cancel your policy. It might be difficult or even impossible to get the license back, depending on the circumstances.

Remember, you're responsible for any business-related losses while you don't have commercial insurance. That includes: