General Liability Insurance for Contractors: Policy Comparisons and Complete Coverage Guide

Introduction

In the high-stakes world of construction and contracting, risk is constant—from on-site injuries and client property damage to lawsuits that emerge long after a job is complete. General liability insurance (GLI) isn’t just a box to check for compliance—it’s an essential layer of protection for the financial health and reputation of your business.

In this guide, we explore everything contractors need to know about GLI: what it covers, how much it costs, how to compare providers, and the state-specific rules you need to follow—especially if you work in places like Texas, New York, or Florida.

What Is General Liability Insurance for Contractors?

General liability insurance protects contractors from financial loss due to third-party claims involving:

• Bodily injury

• Property damage

• Personal and advertising injury (libel, slander, copyright infringement)

This type of insurance is foundational to any construction business, offering legal defense and covering settlements or court-awarded damages when your business is held liable for an incident.

✅ Note: General liability does not cover employee injuries (which fall under workers’ comp), damage to your tools or property, or intentional misconduct.

To learn how to bundle GLI with health and employee protection plans, check out our guide on Small Business Health Insurance Options in Houston, TX.

Key Coverage Areas

1. Bodily Injury & Property Damage

This is the core of every GLI policy. It pays for injury or damage your business operations cause to third parties.

Example: A client trips over a power cord at your jobsite and fractures their wrist. Your policy covers the medical bills and legal costs.

2. Completed Operations Coverage

This protects against liability for incidents that happen after your work is done, which is critical for contractors.

Example: A tile contractor finishes a kitchen remodel. Months later, water damage results from improperly installed pipes. Completed operations coverage pays for repairs and defense costs.

3. Products Liability

If materials or components you provide (or install) cause injury or damage, this coverage steps in.

Example: A defective ceiling fan installed by your team falls and injures a tenant. Even if it was a product flaw, your company could be sued.

4. Personal & Advertising Injury

This includes non-physical risks like slander, libel, false advertising, and even copyright infringement in your marketing.

Example: A competitor claims your ad campaign copied their slogan. This coverage pays legal costs to defend your business.

5. Medical Payments

No-fault coverage that pays small medical bills—usually up to $5,000—without the need for a lawsuit.

Example: A subcontractor’s assistant suffers a minor cut onsite. Medical payments coverage pays for stitches and prevents further claims.

6. Contractual Liability

If you agree in writing to accept certain liabilities—like indemnifying a general contractor—this coverage helps.

Example: You sign a subcontract agreeing to hold the GC harmless for property damage. A mishap occurs, and you’re covered under your policy’s contractual clause.

How Much Does General Liability Insurance Cost?

Cost Drivers

General liability premiums vary widely. Insurers consider the following:

• Type of work performed (roofing = high-risk; painting = lower)

• Business size and payroll

• Annual revenue

• Claims history

• State regulations

• Selected coverage limits

Typical Premium Ranges

* Premiums depend on state, claims history, industry classification, and business size.

State-Specific Requirements for Contractors

Texas

• $1M/$2M minimum for commercial jobs

• Additional insured and waiver of subrogation often required

• Required to show GLI to get licenses in some trades (electricians, HVAC, roofing)

• Popular with ContractorsLiability.com and Progressive due to flexible endorsements

New York City (NYC)

• $1M/$2M base minimum

• Many public jobs require $5M+ in umbrella or excess GL

• Mandatory endorsements:

  • Primary & Non-Contributory Additional Insured

  • Waiver of Subrogation

  • Completed Operations Extension

Miami / South Florida

• $1M/$2M minimum for building permits and city licenses

• Public and coastal projects often require:

  • Builder’s Risk

  • Environmental Liability

  • Hurricane/windstorm riders

Real-World Case Studies

🏛 John’s Historic Renovation Rescue (Texas)

While renovating a historic home, John’s crew damaged the original floors. The homeowner sued for $150,000 in damages. Thanks to John’s GLI policy (with completed operations coverage), his legal defense and the settlement were fully covered.

⚡ Electrician’s Faulty Panel

A Houston-based subcontractor installed a panel that caused an electrical fire months later. His GLI policy’s completed operations coverage handled $85,000 in repairs and legal fees.

🏠 Roofer’s Slip-and-Fall Incident

A homeowner slipped on loose shingles during a residential roof job. The GLI medical payments coverage paid out $7,000 in ER bills, helping avoid a lawsuit.

Quick Comparison Snapshot

Frequently Asked Questions

How much is general liability insurance per month for contractors?

Most contractors pay $66 to $102/month depending on their trade, state, and claims history. A median rate across small business contractors hovers around $78/month.

What’s the minimum GLI a contractor needs to carry?

Most licensing boards and client contracts require at least $1 million per occurrence and $2 million aggregate. Higher-risk jobs or government contracts may demand more.

Does general liability insurance cover subcontractors?

Not by default. You’ll need to:

• Require subcontractors to carry their own GLI, and

• List yourself as an additional insured on their policy.

Some policies offer Contractors Protective Liability to cover negligent acts by subs.

Does it cover tool or equipment theft?

No. That would fall under:

• Inland Marine Insurance for tools/equipment

• Commercial Property Insurance for fixed assets

Can I bundle GLI with other coverages?

Yes—many insurers offer Business Owner Policies (BOPs) that combine GLI with:

• Commercial property

• Business interruption

• Equipment breakdown

You may also bundle with health or life insurance—see Understanding Family Office Insurance for integrated risk planning.

Conclusion

General liability insurance is one of the most important investments a contractor can make. Whether you’re operating in Texas, navigating New York City’s complex licensing, or launching projects near Miami’s flood zones, the right GLI policy shields you from costly legal battles, reputational damage, and lost income.

Most importantly, having solid coverage builds trust with clients and helps you win jobs—especially in today’s compliance-heavy construction landscape.

🔐 Protect your future. Contact Hotaling Insurance Services to get a customized general liability insurance quote tailored to your contracting business.