Construction insurance costs range from $5,000 to $50,000 or more per year depending on your trade classification, payroll, number of employees, and project values. The core program for most contractors includes general liability, workers’ compensation, commercial auto, builders risk, and an umbrella — each priced independently based on your specific risk profile.
For contractors pursuing SBA-financed projects, additional hazard insurance requirements apply beyond the standard construction program. See our guide to SBA hazard insurance requirements for the specific coverage triggers lenders mandate.
Key Takeaways
- GL cost: $2,000–$10,000/year depending on trade and revenue
- Workers’ comp: Largest line item — driven by payroll and classification code
- Builders risk: 1–4% of project value, required by lenders and project owners
- Umbrella: $1,500–$3,000 per $1M layer — most GCs require $2M–$5M minimum from subs
- SBA loans: Require specific hazard insurance with coverage triggers beyond standard GL
Frequently Asked Questions
How much does construction insurance cost per month?
For a small contractor, expect $400–$1,500/month for GL and workers’ comp combined. Mid-size operations with fleet vehicles and multiple crews typically pay $2,000–$5,000/month for the full program.
What insurance do I need for SBA construction loans?
SBA 504 and 7(a) loans require hazard insurance covering fire, storm, and other perils on the financed property. Additional requirements include flood insurance if in a FEMA flood zone and may include business interruption coverage depending on the lender.
Disclaimer: This article is for informational purposes only and does not constitute insurance, legal, or financial advice. Coverage requirements vary by state and operation. Consult our licensed advisors for guidance specific to your business.
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