Contractor insurance: a plain-English guide

Updated 2026-05-01

Clients require it. GCs require it. Licensing boards require it. At some point in almost every trade, someone is going to ask for a certificate of insurance before you set foot on a job. Here's everything you need to know — what policies matter, what they actually cost, and how to get covered without wasting a morning on the phone with a broker.

Short version: Most contractors need GL insurance ($500–$1,500/yr) and a surety bond (required for most state licenses). Tools and equipment need a separate policy. Workers' comp is required in most states if you have employees. You can bind online and get a COI the same day.

The four types of contractor coverage

1. General liability (GL) — the one everyone asks for

GL covers you if your work causes property damage or bodily injury to someone else. A client's tile floor gets cracked. A guest trips over your equipment. A subcontractor's mistake causes water damage. GL is what pays for it — up to your policy limits.

Most clients, GCs, and municipalities require $1M per occurrence / $2M aggregate as a minimum. Commercial work and government contracts often require more.

2. Surety bond — required for most licenses

A surety bond isn't insurance — it's a financial guarantee that you'll follow state laws, complete your work, and pay suppliers. Most state contractor license boards require one before they'll issue a license. It's separate from your GL policy and usually costs $100–$500/year depending on bond amount and your credit.

Surety bond required?

Most state contractor licenses require a surety bond before you can pull permits. Get bonded online — certificates issued same day.

Get bonded at SuretyBondly →

3. Inland marine (tools & equipment coverage)

GL does not cover your own tools, equipment, or materials. Inland marine fills that gap — it covers theft, loss, and accidental damage to equipment whether it's on the job site, in your truck, or in storage. If you own more than $5,000 in tools and equipment, this is worth the cost (typically 2–3% of insured value per year).

4. Workers' compensation

If you have employees — even part-time or seasonal — most states require workers' comp. It covers medical bills and lost wages if an employee is injured on the job. As a sole proprietor with no employees, you usually don't need it (but verify your state's rules). Some GCs require subcontractors to carry it regardless.

What contractor insurance costs in 2026

Trade	GL (annual)	Surety bond (annual)
Handyman	$500–$800	$100–$200
Painter (interior)	$600–$900	$100–$250
Landscaper	$600–$1,000	$100–$300
Plumber	$800–$1,400	$150–$400
Electrician	$900–$1,500	$150–$400
HVAC	$900–$1,600	$150–$400
General Contractor	$1,200–$2,500	$200–$600
Roofer	$2,000–$5,000+	$200–$500

Rates vary by state, annual revenue, claims history, and coverage limits. These are typical ranges for sole proprietors and small crews.

Get a quote today

Most contractors can get a GL quote, bind the policy, and download a COI in under 10 minutes online — no broker call required.

Thimble

A-rated GL, BOP, professional liability, and equipment coverage. Bind online in minutes — download your COI the same day.

Get a contractor insurance quote → →

What a COI is and why you need it

A Certificate of Insurance (COI) is a one-page document that proves your coverage is active. Clients, GCs, and municipalities ask for it before allowing you on a job site. Your carrier generates it — you can usually download one instantly after binding.

Most COIs list:

Your name and business name
The carrier and policy number
Coverage types and limits
Policy effective and expiration dates
The "additional insured" if required

Also need a surety bond?

Most state licensing boards require a separate surety bond. It's not the same as your GL policy, and one doesn't replace the other.

Need a contractor surety bond?

Most state contractor licenses require a surety bond before you can pull permits. Get bonded online — certificates issued same day.

Get bonded at SuretyBondly →

Frequently asked questions

What insurance does a contractor need?

Most contractors need general liability (GL) insurance as a minimum — it covers property damage and bodily injury claims from your work. Depending on your trade, you may also need a surety bond (required for licensing in most states), workers' compensation (if you have employees), commercial auto (if you use a truck for work), and inland marine to cover tools and equipment.

How much does contractor insurance cost?

General liability for most independent contractors runs $500–$1,500 per year, depending on trade, revenue, and state. Roofers and general contractors pay more due to higher risk. Painters, handymen, and landscapers are typically on the lower end. Most policies can be bound online in minutes.

Do I need a surety bond AND insurance?

Yes — they do different things. General liability insurance protects you if you're sued for property damage or injury. A surety bond protects your clients and the state if you fail to complete work, violate a law, or don't pay subcontractors. Most state contractor licenses require a bond before you can legally operate. You need both.

Does my client's homeowner policy cover my work?

No. Homeowner policies explicitly exclude work performed by contractors. If something goes wrong on a job, the claim falls back on you. Your GL policy is what covers it.

What is an additional insured and why do clients ask for it?

An additional insured is someone added to your policy who gets coverage protection. General contractors and property owners frequently require subcontractors to list them as additionally insured before starting a job. Most carriers add additional insureds for free and you can do it online.

Do I need insurance if I'm a sole proprietor or LLC?

Yes. Your business structure doesn't protect you from liability — insurance does. A sole proprietor with no GL coverage is personally liable for any damage or injury claim on the job. An LLC provides some protection for business debts, but not for negligence or on-the-job incidents.

How fast can I get a certificate of insurance?

With online carriers like Thimble, you can get a COI within minutes of binding. You bind the policy, download the PDF, and email it to whoever needs it — same day. Most property managers, GCs, and municipalities accept digital COIs.

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