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Last edited 19 Apr 2022

General Liability Insurance for General Contractors

Carrying general liability insurance as a general contractor is one of the most important components of your business. More and more cities and counties are making it a requirement to do work.

Carrying general liability insurance is not an option, its the way! If a contractor is in your home and damaged property you would expect their insurance to cover the damage. Why would anyone else expect anything less of you? Many contractors make the argument “I would fix anything I broke or redo any work not up the home owner or businesses standard.” That theory sounds good, but the truth is the relationship becomes toxic quickly. In life we only get one chance to make a good first impression. Most home and business owners hiring you to do work quickly lose faith in your ability to get the job done if there is damage or work is performed incorrectly. Having general liability insurance eases all tensions because that home or business owner knows they’re covered.

In every state, city and county in the US we are getting more regulated. Local, state and federal government has more of a say in how we conduct our business than ever. The trend is growing rapidly for contractors to show proof of insurance to these branches of government. By not providing your insurance they will prevent you from doing work in those cities, counties and states. To avoid this some contractors have their sub-contractor pull the permit. If you are caught doing this it will affect your ability to do future work in those areas.

Still today there are places that will not check your insurance. Use this to your advantage! Educate your customers that while the city, county or state doesn’t force you to carry insurance, you should still provide it. This is important when putting in a bid. Your competition may submit a lower bid, but you can give them the satisfaction of knowing you conduct business the right way.

Everyday we see contractors that carry the incorrect type of coverage. Cost means nothing if you are carrying the wrong insurance. When obtaining quotes the first and obvious question from contractors can be “what’s the cheapest policy you can get me.” Saving money is great, you are running a business. Insurance is not a corner to be cut. Several contractors fail to pass this onto their customer. At the start of the year, try to estimate the average number of jobs you’ll be performing and pass on the cost of your insurance into each job. If you are buying sub-par or low quality insurance it may exclude those important elements that could get a claim denied.