Contractors & Trades

How to start, market, license, and protect a contracting or trade business — GL, BOP, workers comp, surety bonds, and trade-specific insurance for plumbers, electricians, roofers, HVAC, handymen, landscapers, and every other trade.

Contracting is one of the highest-income solo businesses you can build in the U.S. — but it's also one of the most regulated, with state licensing, bonding, workers comp, and trade-specific insurance requirements that gate every job. The contractors who actually scale (vs. stay one-truck operations forever) treat the licensing/insurance/COI workflow as a competitive advantage: it's what lets you bid commercial accounts your unlicensed competitors can't touch. This hub covers every major trade: GC, plumbing, electrical, HVAC, roofing, handyman, painting, landscaping, masonry, flooring, locksmithing, tree work, deck building, and home inspection.

Contracting business — at a glance

Business guides

How to start a contractor business
Licensing, tools, first clients
Marketing ideas for contractors
Get more leads and referrals
Contractor license requirements by state
What you need to legally operate
General contractor business guide
Licensing, pricing, managing subs
How to start a deck building business
7 steps to your first signed contract

Insurance by trade

Contractor insurance guide
GL, BOP, workers comp, tools
Contractor surety bonds explained
Required for most state licenses
Plumber insurance
Cost, coverage & COI
Electrician insurance
GL, bond, workers comp
Roofer insurance
Workers comp, fall risk, real claims
HVAC insurance
GL, refrigerant liability, bond
Handyman insurance
Annual vs. per-job coverage
Painter insurance
Overspray coverage, GL
Carpenter insurance
Finish to framing — what's covered
Drywall installer insurance
Water damage, dust contamination
Fence contractor insurance
Underground utility damage risk
Garage door installer insurance
Spring liability, completed ops
Landscaper insurance
GL, equipment, workers comp
Tree trimming insurance
7 things every tree service must know
Locksmith insurance
5 coverages every locksmith needs
Flooring installer insurance
Moisture claims, GL
Masonry contractor insurance
Completed operations coverage
Home inspector insurance
E&O — why it's non-negotiable

Contractor risk — what actually goes wrong

Most contractor claims aren't catastrophic — they're property damage and small-injury incidents that add up. Here's what carriers see most often:

Property damage at the job site
Dropped tools cracking concrete, broken window during install, scratched floors during haul-out. Most common claim — usually $300–$5,000 per incident.
Worker injury (falls, lifting, tools)
Roofing falls average $60K+ in workers comp claims. Without comp coverage, you owe medical out of pocket.
Tool theft
Overnight from truck or job site. Personal auto excludes business tools. Inland marine policy required.
Completed operations claims
Pipe burst weeks after plumbing install, roof leak after replacement, electrical fire from wiring. These claims hit years after the job — GL must include completed ops.
Vehicle accidents in work vehicles
Personal auto excludes business use. A single at-fault accident in a work truck can become uncovered if you don't have commercial auto.
Subcontractor liability
Your uninsured sub damages something — homeowner blames you. Always require a COI from every sub before they step on site.

Related guides on FounderIgnite

Frequently asked questions

Do contractors need general liability insurance?
Yes. Most clients, property managers, and GCs require a certificate of insurance (COI) showing active general liability coverage before you can work on-site. GL covers third-party bodily injury and property damage — if you accidentally break a window or a visitor trips over your equipment, GL pays the claim. Most homeowner insurance policies exclude contractor work, so the homeowner expects you to carry your own coverage.
How much does contractor insurance cost?
Solo contractors typically pay $500–$1,500/year for general liability. Roofers and high-risk trades pay more ($2,000–$6,000+). Your rate depends on your trade, annual revenue, number of employees, and claims history. Add a BOP (business owner's policy) to bundle GL + tools/equipment + business property for usually less than buying separately.
What is a surety bond and do I need one?
A surety bond is a financial guarantee — not insurance — that protects your client if you fail to complete the job or cause damage. Most state contractor licenses require a license bond ($5,000–$25,000 is common). Bonds are inexpensive (typically $100–$300/year) and often bundled with your license application. Important: bonds protect the client, not you — if the bond pays out, you owe the bond company.
What licenses do contractors need?
Licensing requirements vary by state and trade. General contractors, electricians, plumbers, HVAC techs, and roofers almost always need a state license. Handymen may need a local business license but not always a state trade license. Many states also have monetary thresholds — handyman work under $500 may be unlicensed, anything above requires a contractor license. Check your state contractor board website or our contractor license requirements guide.
Does GL insurance cover my tools and equipment?
No — general liability only covers third-party claims. To cover your own tools and equipment against theft or damage, you need an Inland Marine (tools & equipment) policy or a BOP (Business Owner's Policy) that includes it. Many contractors add this for $150–$400/year. Tools stolen from your truck overnight are the #1 contractor inland marine claim — vehicle insurance usually excludes them.
Do I need workers comp if my crew are 1099 contractors?
Maybe — depends on your state. Many states (CA, NY, NJ, WA among others) treat your 1099 subs as employees for workers-comp purposes if they're working on your job site without their own coverage. If a 1099 sub gets hurt and doesn't have their own workers comp, you can be liable. Safer pattern: require every sub to provide a COI for workers comp before stepping on site, OR add them to your own policy.
How do I land my first commercial accounts?
Commercial work pays 2-3x residential per job but has a longer sales cycle. Three channels actually work: property management companies (they manage dozens of buildings each — getting on one PM's preferred-vendor list gets you steady work), commercial GCs for subcontracting (most GCs always need reliable subs), and direct outreach to local commercial property owners using city permit records. See how to get commercial clients for the full playbook.

Ready to get covered?

Most contractors get a GL quote in under 5 minutes — no broker needed. Bundle GL + tools + business property in a BOP for the best value.

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