General Liability Insurance for Contractors: Coverage, Cost, Providers

General liability insurance protects your business from potential lawsuits and other claims and may be required as part of a contract.

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⏰ Estimated read time: 7 minutes

General liability insurance for contractors can protect you from third-party claims of bodily injury or property damage as a result of business activity. General contractors, carpenters, roofers and other construction workers should carry general liability insurance and may be required to do so by their employer, city or state.

Here’s what you need to know about general liability insurance for contractors and construction businesses, as well as how to find the right business insurance for you.

Are you a contractor outside the construction industry? Check out our guide to independent contractor insurance for more information.

What types of contractors need general liability insurance?

Contractors, tradespeople and construction businesses that may need this type of liability coverage include:

General contractors, masonry contractors, concrete contractors, drywall contractors, excavation contractors, paving contractors and permanent yard contractors.

Roofers, carpenters, plumbers, welders, electricians, painters, landscapers, appliance repair technicians, home inspectors and handypeople.

Debris removal businesses, snow and ice removal businesses, tree service businesses, interior and exterior construction businesses.

Clients may require that you show proof of general liability insurance before agreeing to work with your business. Your contract may stipulate that you provide a certificate of liability insurance, or COI, as part of the agreement.

Similarly, depending on the project or type of construction your business performs, your city or state may also require that you meet general liability insurance requirements when seeking a permit or license for that work.

What does general liability insurance for contractors cover?

Bodily injury. If a customer trips and falls at a job site where you’re doing construction work, you could be held liable for their injuries. If the person sues you, your general liability insurance can help cover associated legal, medical and settlement costs.

General liability insurance doesn't, however, cover injuries sustained by employees — for that coverage, you’ll need workers’ compensation insurance.

Property damage. If you’re renovating a client’s house and accidentally damage some of their furniture in the process, you could be held responsible for that damage. Your general liability insurance can cover the cost to replace or repair the furniture, as well as any legal costs if the client sues over the property damage.

A general liability policy will cover damage to third-party property only. You’ll need business property insurance to protect your commercial assets.

Personal and advertising injury. If an employee who works for your contracting company makes false statements about another general contracting company and that company sues you for slander, a general liability policy can help cover legal and settlement costs. Your policy also can cover personal injury claims associated with copyright infringement and libel.

Completed operations liability. If you repair plumbing at a client’s home and a pipe you installed bursts a few months later, you could still be held liable for the damage since you performed the work. General liability insurance for contractors can help cover your legal costs and any court-ordered damages.

Add-ons for general liability policies

Some insurance companies offer add-ons for general liability policies. Add-ons offer extra protection that basic coverage doesn’t provide. Here are a few examples of add-ons that may be available for contractors and construction businesses:

Equipment coverage. An equipment add-on can help cover the cost to replace or repair your tools and equipment in the event that they break, are damaged or are stolen. This coverage bridges the gap between general liability and commercial property insurance.

Data breach coverage. If a hacker breaks into your computer systems and steals customer information, data breach insurance can help cover the costs associated with notifying clients, offering credit monitoring and improving security.