Guide
General liability insurance for contractors — what it covers, costs, and who to buy from
Published
General liability insurance for contractors covers third-party bodily injury, property damage, and completed-operations claims on a per-occurrence basis — typically $1M per occurrence / $2M aggregate — at annual premiums of $480–$1,860 for solo contractors and $1,800–$6,500 for 5-tech shops depending on trade, state, and claims history (verified April 2026 via Thimble, Next Insurance, Simply Business, Hiscox, and The Hartford published rate tables plus the NAIC 2026 commercial lines report). General liability is the one policy every HVAC, plumbing, electrical, and roofing contractor must carry — it's legally required in most states for licensing, contractually required by almost every commercial customer, and the cheapest coverage relative to the catastrophic losses it prevents.
This guide breaks down what GL actually covers, what it doesn't, what contractors realistically pay in 2026, and how the major carriers compare — including the online-first options (Thimble, Next, Simply Business) and traditional carriers (Hiscox, The Hartford, Travelers).
What general liability actually covers
A standard contractor general liability policy covers four things:
Third-party bodily injury. A customer trips over your tool bag and breaks their wrist. A homeowner's child runs into the path of your ladder. Your GL carrier pays medical bills, legal defense, and any settlement up to the policy limit.
Third-party property damage. You scorch a kitchen cabinet during a brazing job. A ladder leans against siding and cracks a window. You drop a water heater onto a hardwood floor. GL covers the cost to repair or replace.
Products and completed operations. This is the coverage most contractors don't understand and most need the most. It covers damage or injury caused by your completed work after you've left the job. A water heater you installed fails six months later and floods the basement. A panel upgrade you did last year causes a fire. A roof you installed leaks and damages drywall. Completed-operations is where the expensive claims live.
Personal and advertising injury. Libel, slander, false arrest, copyright infringement in advertising. Less common for contractors but sometimes triggered by review disputes, Facebook ads, or competitor lawsuits.
Standard limits contractors buy:
| Limit | Per-occurrence | Aggregate (annual) | Typical buyer |
|---|---|---|---|
| Minimum | $500,000 | $1,000,000 | Solo, light residential only |
| Standard | $1,000,000 | $2,000,000 | Most small shops |
| Commercial-required | $1,000,000 | $2,000,000 | Required by most property managers |
| Premium | $2,000,000 | $4,000,000 | Commercial general contractors, builders |
Most HVAC, plumbing, electrical, and roofing contractors need $1M/$2M. Going higher costs ~15–30% more and is only warranted when customers demand it contractually.
What general liability does NOT cover
This is where contractors get into trouble. GL is narrower than people think.
Damage to your own work. If the furnace you installed fails and you have to replace it, that's on your warranty — not GL. GL covers the drywall the leak damaged, not the furnace itself.
Employee injuries. That's workers' compensation (different policy; required in every state except Texas). See our workers compensation insurance guide for the details.
Damage to your tools, trucks, or equipment. That's commercial auto + inland marine (sometimes called contractor's equipment coverage). GL doesn't touch your property.
Professional errors (design or engineering). If you're a roofer who recommended the wrong membrane and it fails under ponding, professional liability (E&O) covers design error claims. GL doesn't.
Intentional acts, fraud, or criminal behavior. Self-explanatory.
Pollution liability. Most GL policies exclude pollution completely (oil leaks, refrigerant releases, asbestos, lead). Contractors working with these materials need a separate contractors pollution liability (CPL) policy.
Subcontractor work (on some policies). If you hire subs, confirm your GL covers their work. Many policies exclude it, forcing you to verify each sub carries their own GL and name you as additional insured.
Typical GL costs by trade (verified April 2026)
Premiums vary by trade, state, revenue, claims history, and whether you operate with employees. The ranges below reflect April 2026 quotes from Thimble, Next Insurance, Simply Business, and Hiscox for a $1M/$2M policy.
| Trade | Solo operator | 5-tech shop | 15-tech shop |
|---|---|---|---|
| HVAC service | $540–$1,100 | $2,200–$5,800 | $7,500–$18,000 |
| HVAC install + service | $720–$1,450 | $3,100–$7,800 | $9,500–$22,000 |
| Residential plumbing | $480–$980 | $2,100–$5,400 | $6,800–$16,500 |
| Commercial plumbing | $720–$1,650 | $3,400–$8,400 | $10,500–$24,000 |
| Residential electrical | $540–$1,200 | $2,400–$6,200 | $7,800–$19,500 |
| Commercial electrical | $780–$1,860 | $3,800–$9,200 | $11,500–$26,000 |
| Residential roofing | $900–$2,400 | $5,200–$14,000 | $16,500–$42,000 |
| Commercial roofing | $1,450–$4,200 | $9,500–$24,000 | $32,000–$78,000 |
Roofing premiums are the highest because roofing has the highest claim frequency in construction trades — falls, water intrusion during re-roof, wind damage to exposed decking. A roofer paying $14,000/year for GL is at the low end of the range.
The claims-history multiplier. One significant claim can 2–3× your premium for 3–5 years. Contractors who haven't filed a claim in 5+ years see 15–25% discounts from most carriers.
State variation. California, Florida, New York, Texas, and Illinois premiums run 20–40% above national average. Idaho, Iowa, Tennessee, and Arkansas run below.
The major carriers compared
The contractor GL market in 2026 splits into three categories: online-first (Thimble, Next, Simply Business, Hiscox Direct), traditional direct writers (The Hartford, Travelers, Chubb), and broker-accessed (any of the above, plus specialty markets).
Online-first carriers
Thimble. On-demand or annual GL for small contractors. Best for solo and 1–3 tech shops. Monthly pricing. Fast online quote (often 5 minutes start to bind). Not ideal for commercial contractors or shops with revenue above $500K.
- Strengths: fastest quote-to-bind, flexible short-term policies, certificates of insurance issued instantly, good for one-off commercial jobs where the customer requires proof of insurance
- Weaknesses: premium increases noticeably once revenue exceeds $250K, coverage exclusions on some specialty trades (solar, high-voltage electrical), doesn't handle workers' comp
- Typical solo HVAC annual premium: $650–$950
Next Insurance. Full small-business insurance suite — GL, workers' comp, commercial auto, tools & equipment, E&O. Strong for 1–15 employee shops that want everything in one place.
- Strengths: bundles well (GL + WC + commercial auto in one login), quick certificates of insurance, live certificates that can be shared via link, 10–15% bundled discount
- Weaknesses: renewal pricing less predictable than traditional, claims response slower than Hartford or Travelers
- Typical 5-tech plumbing shop annual premium: $3,200–$5,800
Simply Business. Broker-style aggregator — they collect your info once and shop across their carrier panel (Liberty Mutual, Great American, Hiscox, Markel). Works well for shops that want coverage variety without using a traditional broker.
- Strengths: carrier variety, competitive pricing through aggregation, useful for trades that get declined by one or two carriers
- Weaknesses: customer service routes through Simply Business, not the carrier — can slow claims, placements are at Simply Business's discretion
- Typical 10-tech electrical shop annual premium: $5,500–$9,800
Hiscox. Direct-to-small-business carrier that's been in the contractor space since 2005. Middle-ground pricing; strong for 3–20 employee shops.
- Strengths: solid financial rating (AM Best A), broad contractor class eligibility, E&O coverage available as add-on
- Weaknesses: online quote tool less flexible than Thimble or Next, claims require phone follow-up
- Typical 5-tech HVAC install shop annual premium: $3,400–$6,200
Traditional carriers (require a broker in most cases)
The Hartford. Strong for commercial contractors, 10+ employee shops, and operations needing bonded work. Typically 10–15% more expensive than online-first but with better claims handling.
Travelers. Deep contractor expertise. Competitive on commercial trades (commercial HVAC, commercial roofing). Agent-placed only in most states.
Chubb. Premium carrier for larger contractors ($2M+ revenue). Agent-placed. Priced 15–30% above online-first but with industry-leading claims service.
How to choose a carrier
For solo + 1–3 tech shops: Thimble or Next Insurance online, 15 minutes to bind.
For 5–15 tech shops: quote Next, Simply Business, and Hiscox online. Then get one broker quote from an independent agent shopping The Hartford or Travelers. Compare side by side.
For 15+ tech shops or commercial-heavy operations: broker-driven shopping. The 10–20% premium premium over online-first is usually worth it for claims responsiveness and policy flexibility.
How much insurance do you actually need?
Three standards contractors hit:
Licensing minimum. Each state sets a minimum GL for contractor licensing. Most set it at $500,000 per occurrence. Check your state licensing board for the exact requirement.
Customer contractual minimum. Most residential customers don't ask. Most commercial customers require $1M per occurrence minimum — often $2M for larger projects. Property management companies require $1M. Schools, hospitals, and municipal work require $2M+ (sometimes $5M).
Practical exposure-based limit. The real question: what's the worst-case scenario on your largest job? A $40,000 commercial HVAC install that catches fire could produce $500K+ in building damage and potential injury claims. $1M/$2M is the practical floor for any contractor doing more than $200/job.
Certificates of insurance — the proof the customer wants
A certificate of insurance (COI) is a one-page document showing your coverage limits, carrier, policy number, and effective dates. Commercial customers require one before you start work.
Typical COI fields:
- Insured name, address
- Policy type (CGL), carrier name, policy number
- Per-occurrence and aggregate limits
- Effective date and expiration date
- Additional insured endorsement — naming the customer as additional insured on the policy
- Certificate holder — the party the COI is being issued to
The "additional insured" endorsement is where commercial customers get real protection. It extends your GL coverage to include the customer for claims arising from your work. Some carriers include this at no charge; others charge $50–$250 to add it per customer.
Online-first carriers issue COIs instantly. Thimble and Next generate them in 30 seconds. Traditional carriers usually route through the broker, which takes 1–3 business days.
Common contractor mistakes
1. Letting the policy lapse mid-job. Miss a premium payment, policy lapses, claim occurs, you have no coverage. Auto-pay is mandatory. Use a credit card in case of bank errors.
2. Underreporting revenue at quote time. Carriers audit at renewal. If you told them $200K and actually did $400K, you owe the premium difference plus sometimes penalties. Be honest; underreporting saves nothing long-term.
3. Not telling the carrier about subcontractors. Using subs without disclosure can void coverage on claims involving sub work. Either disclose and pay the slightly higher premium, or ensure every sub carries their own GL with you named as additional insured.
4. Assuming GL covers employee injuries. It doesn't. Workers' compensation is required separately in every state except Texas (and even Texas shops should carry it).
5. Not buying completed operations coverage. Some cheap policies exclude completed-operations entirely, meaning you're only covered for injuries that happen while you're on-site. For any contractor who leaves completed work behind, this exclusion is a disaster. Read the policy.
6. Insufficient aggregate limits. A $1M/$1M policy (same per-occurrence and aggregate) means one $900K claim exhausts almost all your coverage for the year. $1M/$2M is the practical minimum.
Bundle with other coverages
Most contractors need three policies:
| Policy | What it covers | Typical solo cost | Typical 5-tech cost |
|---|---|---|---|
| General liability | Third-party injury + property damage | $540–$1,200 | $2,200–$5,800 |
| Workers' compensation | Employee on-job injuries | Not required solo | $1,800–$8,500 |
| Commercial auto | Vehicle collisions + cargo | $1,200–$2,400/vehicle | $6,000–$16,000 |
Bundling through one carrier (Next Insurance or The Hartford) usually saves 10–15% versus buying separately. See our commercial fleet insurance for contractors guide for vehicle coverage details, and contractor insurance basics for the full insurance stack.
FAQ
Do I need general liability insurance if I'm a solo contractor?
Yes. Your state likely requires it for licensing (most set a $500K minimum), and even where it's not legally required, any commercial customer and most property managers will require proof. A single claim without coverage can end a solo business.
How is general liability different from professional liability?
GL covers physical injury and property damage caused by your operations. Professional liability (errors & omissions, or E&O) covers financial losses caused by design errors, bad advice, or missed deadlines. Most contractors need both, though GL is the one universally required.
Can I buy GL for one day?
Yes — Thimble specializes in on-demand policies billed by the day or job. Useful for side jobs or one-off commercial work where you need a COI but don't want an annual policy. Daily rates run $20–$75/day depending on trade.
Does general liability cover my tools if they're stolen?
No. Tool theft is covered by a separate "tools and equipment" (inland marine) endorsement, typically $150–$400/year for $10K–$25K in coverage. Most carriers sell it as an add-on to a contractor GL policy.
How fast can I get general liability coverage?
Online-first carriers (Thimble, Next, Simply Business) can bind coverage and issue a certificate in 10–30 minutes. Traditional carriers through a broker typically take 1–3 business days.
What's the cheapest way to get a certificate of insurance for a one-time job?
Thimble's per-job or monthly policy is the fastest option for one-time commercial work. A $75–$150 monthly premium gets you a valid GL certificate you can cancel after the job.
Do I need separate insurance if I work with subcontractors?
Most GL policies require disclosure of subcontractor work and either cover it (at higher premium) or require each sub to carry their own GL with you named as additional insured. Confirm with your carrier before hiring your first sub.
Related guides
- Contractor insurance basics — GL, workers comp, commercial auto
- Commercial fleet insurance for contractors
- Consumer financing for contractors
- Hiring your first service technician
Next step for solo and small contractors: get quotes from Thimble and Next Insurance online (15 minutes total). Compare the annual policy price to Thimble's monthly plan. Check whether completed operations is included at your requested limit. Bind and save the COI in your CRM — every commercial customer will ask for it.
Next step for 10+ tech shops: quote Next Insurance, Simply Business, and Hiscox online, then ask an independent broker for a Hartford or Travelers quote. Compare all four on premium, claim service ratings, and policy exclusions. Don't pick on price alone — a 20% premium cheaper policy that disputes claims isn't a deal.