General Contractor Insurance: What It Actually Costs and Covers

General liability insurance for a general contractor typically costs $600 to $5,000 a year at standard limits, though the real number depends heavily on project size, revenue, and how much work you subcontract out.

How much does general liability insurance cost for a general contractor?

• Small contractor: roughly $500 to $1,500 a year
• Broader national range across trades, sizes, and states at $1M/$2M limits: $612 to $5,040 a year

$1 million per occurrence / $2 million aggregate is the baseline most client and subcontractor agreements require. On projects over $1 million in value, GCs commonly also require subs to carry a $2 million umbrella on top of that base limit.

Why is construction defect litigation such a big deal?

Construction defect litigation costs the U.S. construction industry an estimated $15 billion a year. It's not a rare, catastrophic event, it's a routine cost of doing business at scale: major homebuilders like D.R. Horton now hold over $1.1 billion in legal reserves specifically for defect disputes, up 57% since 2022. A general contractor without adequate coverage is exposed to exactly this category of claim, often years after a project wraps.

What are the biggest injury risks on a GC's job site?

OSHA's "Fatal Four" hazards, falls, struck-by incidents, electrocution, and caught-in/between accidents, account for nearly 60% of all construction fatalities. As the GC, you're frequently swept into liability for subcontractor-caused injuries too, through additional-insured and indemnification clauses in your own contracts, not just your direct employees' accidents.

How much are GC insurance rates actually rising?

General liability rates for construction surged 22% year-over-year in Q1 2026, the steepest increase of any industry sector tracked by Marsh McLennan's Global Insurance Market Index. If your renewal came in higher than expected recently, this is why, it's an industry-wide trend, not something specific to your claims history.

What bonding is typically required?

Most states require a GC license bond, and amounts vary widely: California requires $25,000 (since January 2023), Washington $30,000, Florida $20,000 for Division I contractors ($10,000 for Division II), and Arkansas a $10,000 minimum for commercial GCs. Bonding is separate from, and in addition to, your liability insurance.

See full coverage details for General Contractor Insurance, or start a free quote to compare your own numbers.