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.
Texas contractors face unique insurance requirements tied to TDLR licensing and facility contract compliance — our guide to HVAC contractor insurance coverage gaps provides a detailed breakdown for mechanical trade businesses.
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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Schedule ConsultationAbout the cost figures and examples in this article: Any premium ranges, cost figures, or pricing factors discussed here are general market estimates drawn from publicly available industry data and are provided for educational context only. They are not quotes, offers, or guarantees of cost, and they do not reflect the price Hotaling Insurance Services will or can offer for any specific policy. Actual premiums are determined solely by the insurance carrier based on your individual risk profile, coverage selections, claims history, location, and other underwriting factors, and they vary widely from the general ranges described above. Any client scenarios are anonymized, illustrative composites created for educational purposes; they do not depict actual named clients and should not be relied upon as a prediction of results. Nothing in this article constitutes financial, legal, tax, or insurance advice. For pricing and coverage specific to your organization, please request a consultation with our licensed advisors.