Liability Insurance for Contractors: What It Is, What It Covers, and Where to Get It
When you’re working on someone’s home or property, accidents can happen—tools get dropped, pipes burst, or someone trips over your extension cord. That’s where contractor liability insurance comes in. If you’re a contractor looking to protect your business, finances, and reputation, understanding general liability coverage is essential.
What Is Liability Insurance for Contractors?
Liability insurance, often called general liability insurance, is a type of business insurance that protects contractors from claims of:
- Property damage (e.g., accidentally breaking a client’s window)
- Bodily injury (e.g., a homeowner slipping on a wet floor you just mopped)
- Personal injury (e.g., advertising-related claims like defamation or copyright issues)
It’s one of the most common and most important forms of insurance for general contractors, electricians, plumbers, painters, roofers, and other tradespeople.
What Does Contractor Liability Insurance Cover?
While policies vary slightly depending on the provider, most contractor liability insurance policies cover:
✅ Third-party bodily injury
If someone is injured as a result of your work or on your job site, your policy can help cover medical costs and legal fees.
✅ Third-party property damage
If you damage a client’s home, driveway, or belongings, this insurance helps pay for repair or replacement.
✅ Legal fees and settlements
Covers the cost of defending your business in court if you’re sued, including settlements or judgments.
✅ Completed operations
If a client claims your work caused damage after the job is done (like a leaking pipe you installed), this is typically covered.
What it doesn’t cover: Employee injuries (that’s workers’ comp), damage to your own tools or property, or intentional misconduct.
How Much Does Contractor Liability Insurance Cost?
The cost of liability insurance for contractors depends on several factors, including:
- Your trade (e.g., roofing costs more than painting)
- Business size and annual revenue
- Location and state regulations
- Claims history and years in business
- Coverage limits and deductibles
💰 Average Cost:
- Most independent contractors pay $40 to $70/month for basic general liability coverage.
- Larger contractors or high-risk trades may pay $100+ per month.
Tip: Bundle policies (like with commercial auto or tools coverage) for potential discounts.
Where Can Contractors Get Liability Insurance?
Several companies specialize in affordable, contractor-friendly insurance options. Here are some of the top providers:
🔹 Next Insurance
An online-first insurer offering fast quotes and easy policy management. Great for solo contractors and small teams.
🔹 Insureon
A marketplace that lets you compare contractor insurance quotes from multiple providers, including Hiscox, Liberty Mutual, and The Hartford.
🔹 The Hartford
Known for contractor-specific packages, excellent customer service, and add-ons like equipment coverage and business income insurance.
🔹 Liberty Mutual
Provides liability policies tailored to trades like electricians, plumbers, and roofers—with support through local agents.
Do Contractors Really Need Liability Insurance?
Yes—contractor liability insurance isn’t optional in many cases:
- Clients may require proof of insurance before hiring you.
- Licensing boards in many states mandate liability coverage.
- General contractors may require their subs to carry insurance.
- Uninsured claims can bankrupt small businesses.
Think of it this way: a single accident could cost thousands in repairs, legal fees, or lost business. Liability insurance is a low monthly investment that protects your livelihood.
Final Thoughts
Contractor liability insurance is essential protection for anyone working in the trades. Whether you’re a solo handyman or running a growing contracting business, the right coverage gives you peace of mind and keeps your business compliant and protected. Need help finding the right insurance? Visit our Contractor Insurance Resource Page to learn more or explore options with trusted providers.
