How much does insurance cost for a general contractor?

The coverages a general contractor carries, and who demands each

A general contractor’s insurance comes from three directions: the state (workers’ comp, auto liability, license conditions), the project owner’s contract (limits, builders’ risk, bonds) and the GC’s own balance sheet (equipment, umbrella). The table sorts the usual lines by where the requirement comes from.

Your subcontractors are part of your premium

This is where GC insurance differs most from a trade contractor’s. Two mechanisms put subcontracted work on your own bill.

Workers’ comp. The standard policy (WC 00 00 00 C, Part Five) charges premium on the payroll of your employees and of “all other persons engaged in work that could make us liable under Part One”. If you do not have payroll records for those people, “the contract price for their services and materials may be used as the premium basis”. The clause does not apply if you can show the subcontractor’s employer had its own coverage⁠⁵. State law creates the liability in the first place. Florida’s statute is typical: when a contractor sublets work, all employees on the job are “deemed to be employed in one and the same business”, and the contractor must pay their compensation “except to employees of a subcontractor who has secured such payment”. It also requires the contractor to collect evidence of the subcontractor’s coverage, and lets it recover benefits it paid from the uninsured sub⁠⁶.

What that costs, as our illustration: an uninsured framing sub is paid $150,000 and you have no payroll records for its crew. If the auditor charges that contract price at a rate equal to Ohio’s 5645 base rate ($3.4595), the added premium is $5,189.25⁠¹⁠⁵. The Ohio rate is used only for scale: the policy wording quoted applies to insurers that use the standard policy form, and your insurer’s rate for the class will differ.

General liability. Penn National’s audit guide says total-cost rating “is primarily for general liability when subcontractors are used”, and total cost includes “all labor, materials, and equipment furnished”. It says certificates of insurance for both comp and GL, collected when each subcontractor is hired, “will lessen the chargeable premium at time of audit”. It also warns that work under an owner-controlled (wrap-up) program should be endorsed onto your policy before the job starts, or it “may result in audit charges on both policies”⁠⁷. How the audit itself works is in the premium audit guide.

Workers’ comp classes for a GC’s own crew

Comp is priced by the kind of work each employee does. A GC that frames houses with its own carpenters pays a high rate on that payroll; one that subcontracts all trade work and employs only superintendents, estimators and office staff pays a fraction of it. Ohio, Washington and Wyoming run monopolistic state funds that publish the rate itself:

Base rates set by the state fund before experience modification. Ohio and Wyoming charge per $100 of payroll; Washington charges per hour worked, and part is withheld from wages. Other states’ insurers file their own rates; see where rates are published.

What the schedules show:

• Ohio. Residential carpentry (5645) at $3.4595 per $100 ranks 48th highest of Ohio’s 501 classes. It is 2.0 times carpentry NOC (5403, $1.7131), 5.8 times the class for project managers, construction executives, construction managers and superintendents (5606, $0.593), and 74 times clerical (8810, $0.0466). These are our calculations from the schedule effective July 1, 2026⁠¹.
• Washington. Wood frame building construction and alterations (0510) costs $4.6938 for every hour worked in 2026, 15th highest of 316 hourly classes (our count). Non-wood frame construction (0518) is $2.6722, building repair and remodeling (0516) $2.9469, and a site superintendent or manager (4900) $0.519⁠². Washington charges by the hour, so pay levels do not change the premium; part of each rate is withheld from the worker’s wages.
• Wyoming. Wyoming’s NAICS-based schedule puts all building construction in 236000 at $2.55 per $100 in 2026, with no split between framing and supervision⁠³. Construction is extrahazardous employment under state law, so coverage is compulsory and bought only from the state fund⁠³⁠³⁴.

In the other states, insurers file rates on top of rating-bureau loss costs. The class codes are the same in most NCCI states, but the rate per $100 is each insurer’s own; see workers’ comp class codes and the Ohio, Washington and Wyoming rate pages.

Three state-fund examples

These are our calculations with stated assumptions, at 2026 base rates, before experience modification. They are not quotes.

1. Ohio, a residential builder

   $400,000 of carpentry payroll in 5645, $120,000 for a superintendent in 5606 and $80,000 of office payroll in 8810: $13,838.00 + $711.60 + $37.28 = $14,586.88 a year⁠¹. If the superintendent’s payroll were reported in 5645 instead, that line alone would rise from $711.60 to $4,151.40. An experience-rated employer then multiplies each base rate by its experience modification⁠³⁵.

2. Washington, a framing crew

   Four carpenters at 1,800 hours each in 0510 is 7,200 hours × $4.6938 = $33,795.36, of which $5,685.48 is the workers’ share that may be withheld. A superintendent’s 2,000 hours in 4900 add $1,038.00⁠².

3. Wyoming

   $500,000 of payroll in 236000: $500,000 ÷ 100 × $2.55 = $12,750 before the employer’s experience factor⁠³.

The BLS figure for construction

The Bureau of Labor Statistics’ June 2026 survey puts construction employers’ workers’ comp cost at $1.10 per hour worked, 2.1% of total compensation, and health insurance at $3.71 per hour. The comp figure is 2.6 times the $0.43 private-industry average (our calculation)⁠⁴. It averages general contractors with every specialty trade and with office staff, so it is a sector benchmark, not a GC rate.

Average employer cost per employee hour worked for workers' compensation and for health insurance, averaged across all workers in the group, plus workers' compensation as a percent of total compensation. Group averages mix high- and low-risk jobs, so they are not a premium rate for any single business. U.S. Bureau of Labor Statistics (BLS), National Compensation Survey, June 2026 (2026 Q2), private industry workers, released 9 Sep 2026.

What the license requires in six states

GC licensing rules vary more than the trades’, because many states tie the bond or insurance amount to the size or type of work. Rules confirmed at the boards and in statutes on October 13, 2026:

Scroll the table sideways to see every column.

What the rules mean in practice:

• California. A B licensee with no employees may file an exemption from comp, but not if the license is qualified by a responsible managing employee, or if it also holds C-8, C-20, C-22, C-39 or D-49⁠⁸. That changes on January 1, 2028. The version of Business and Professions Code 7125 operative from that date, added in 2022 and amended by SB 1455 in 2024, requires a comp certificate of every active licensee; the only exemption left is a joint venture with no employees⁠⁹. A one-person GC that relies on the exemption should budget for a comp policy from 2028. A lapse in coverage suspends the license, and work done while suspended is unlicensed⁠⁸. At renewal, licensees must list the three comp class codes with the highest payroll on their policy⁠⁸⁠⁹.
• Florida. The $300,000/$50,000 minimums apply to the general and building contractor licenses; the residential contractor license needs $100,000/$25,000. The certificate must name the board as certificate holder, with 30 days’ notice of cancellation, and the board audits licensees at random⁠¹².
• Arizona. The ROC bond scales with your estimated annual volume, so a growing commercial GC moves into a higher bond bracket. Residential and dual licensees must also post a further $200,000 bond or pay into the residential contractors’ recovery fund⁠¹³.
• Nevada. The board fixes each bond “with reference to the contractor’s financial and professional responsibility and the magnitude of the contractor’s operations”⁠¹⁴. The comp affidavit is not available to a contractor who works, or bids, as a subcontractor for a principal contractor⁠¹⁴.
• Washington. A lapsed bond or policy automatically suspends the registration until a replacement is filed⁠¹⁵⁠¹⁶.
• Virginia. The license class follows contract size: Class A for single contracts of $150,000 or more or $1 million in 12 months, Class B from $30,000 per contract or $250,000 a year⁠¹⁹. The rules test net worth, so insurance requirements come from contracts and from Virginia’s comp law, not the license.

The state hubs for California, Florida, Arizona, Nevada, Washington and Virginia cover each state’s comp system, and the workers’ comp requirements table gives every state’s employee threshold.

General liability: two ERGO NEXT figures that look contradictory

Two insurer-published premiums exist for general contractors, both from ERGO NEXT, and they describe different things:

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

• $210 a month is the average for general contractors on ERGO NEXT’s general liability cost page, among active customers who bought GL over the prior 12 months (data updated April 2026)⁠²¹.
• $56 to $227 a month is what “most” of its GC customers pay, according to its general contractor cost page (data updated October 2026). That page also says GL “costs 93% of our customers $77 on average per month”, while its own breakdown beneath reads “93% pay over $77”, and it says that its lowest advertised price, $83.33 a month, is the GL minimum premium for general contractors in Texas. Its GL limits run from $300,000 to $1 million per occurrence⁠²².

The $77 sentence is contradicted by the breakdown under it (2% under $35, 2% $34 to $56, 3% $56 to $78, 93% over $77), so $77 reads as a bracket boundary, not an average; the page does not say. The $210 average and the $56 to $227 range come six months apart and neither page reconciles them. Both describe ERGO NEXT’s own buyers, at limits that can be lower than a commercial owner’s contract requires. Neither is a market price. The same table includes ERGO NEXT’s $160 monthly average for construction workers’ comp; the disclosure on that page refers to property buyers, apparently a copy error⁠²³.

How GL is priced for a GC:

• Payroll and subcontract cost. “Payroll is the ISO General Liability premium base for most contracting and service risks”⁠²⁰. Work you sublet is commonly rated on total cost, as above⁠⁷, so a GC that subcontracts everything still has a GL exposure base.
• Completed operations. A defect that injures someone or damages property after handover falls under the products-completed operations part of the policy. Public owners often set a separate limit for it: Rhode Island’s standard is $1 million per occurrence, $1 million general aggregate and $1 million products-completed operations aggregate⁠²⁷.
• Additional insureds. Owners and upstream contractors ask to be added to your policy; see general liability for the endorsements contracts name.

Broker surveys put GL renewal pricing up in the second quarter of 2026: +1.8% in the CIAB index and +5.44% in the Ivans Index⁠³⁰⁠³¹.

Builders’ risk, equipment, vehicles and umbrella

• Builders’ risk. The NAIC’s marine definition covers “builders risks or installation risks covering interest of owner, seller or contractor”⁠²⁵. Who buys it is a contract term. One public owner’s conditions, the University of Colorado Boulder’s, require the contractor to insure 100% of completed value on a replacement-cost basis, with a deductible of no more than $50,000; if the contractor does not buy it, the university does and charges the cost to the contractor⁠²⁶. No official or insurer source we found publishes builders’ risk rates; the price follows the completed value, construction type, location and deductible the contract sets.
• Contractor’s equipment. ERGO NEXT says tools and equipment cover “costs 46% of our customers $32 on average per month” (its breakdown reads “46% pay under $32”), with limits of $3,000 to $5,000 per item on its blanket form (October 2026)⁠²². Insureon reports an average of $42 a month for inland marine among its contractor customers, most with fewer than five employees (page updated September 18, 2026)⁠³². A GC owning excavators or lifts is outside both samples; see inland marine.
• Office and yard. ERGO NEXT reports a $85 monthly commercial property average for general contractors (April 2026)⁠³³, and on its GC page says 43% of those customers pay $30 to $60 a month⁠²².
• Commercial auto. Progressive Commercial reports a 2025 median of $203 a month per power unit for contractors, and an average of $260, for liability and physical damage on new policies with no driver violations⁠²⁴. CIAB brokers reported commercial auto renewals up 4.5% in Q2 2026⁠³⁰. See commercial auto.
• Umbrella. Some public owners let an umbrella make up the required limits. Idaho’s state contracts, for example, ask for CGL “and, if necessary, Commercial Umbrella insurance” with at least $1 million each occurrence and $2 million aggregate, plus $1 million employer’s liability limits⁠²⁸. Umbrella renewals rose 5.3% in CIAB’s Q2 2026 survey and 7.96% in Ivans’⁠³⁰⁠³¹. See commercial umbrella.

Bonds on public and private work

License bonds are fixed by statute and protect the public, not you: California’s $25,000 bond is for consumers harmed by defective construction or license violations and employees owed wages⁠¹⁰; Washington’s covers unpaid labor, taxes, suppliers and breach of contract⁠¹⁵. Contract bonds are the larger commitment. Federal construction contracts over $150,000 require performance and payment bonds, and contracts above $35,000 up to $150,000 require other payment protections⁠²⁹. Each surety prices its own bonds on your credit and finances; no official source publishes those rates. See surety bonds.

Budgeting a GC’s insurance from your own numbers

No source publishes a total insurance cost for general contractors, and none can be given without your payroll, subcontract volume and state. A method that produces figures you can check against quotes:

1. Split payroll by comp class

   Field carpentry, supervision, estimating and office, with time records for anyone who does both. Apply the state rate (official in OH, WA and WY) and your experience mod.

2. List every subcontractor with a certificate

   Comp and GL certificates, valid for the dates worked. Any sub without one is a potential audit charge at its contract price⁠⁵⁠⁷.

3. Price GL on payroll plus subcontract cost

   Ask each insurer which class and premium base it used, and whether completed operations carries its own aggregate.

4. Read the contracts before choosing limits

   License minimums are floors. Owner contracts set GL, auto, employer’s liability and umbrella limits, and may make you buy builders’ risk.

5. Add vehicles, equipment and bonds

   Each has its own base: vehicles and drivers, equipment values, bond amount and credit.

The premium calculation guide walks through each step, and the workers’ comp estimator runs the comp arithmetic with official rates.

Sources

1. 1
   Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-06, Appendix A: base rates effective July 1, 2026 (private employers) Checked 13 Oct 2026 · Back to text ↑
2. 2
   Washington State Department of Labor & Industries, 2026 hourly rates by risk classification Checked 13 Oct 2026 · Back to text ↑
3. 3
   Wyoming Department of Workforce Services, Workers' compensation 2026 industry base rates by classification Checked 13 Oct 2026 · Back to text ↑
4. 4
   U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released Sept. 9, 2026) Checked 13 Oct 2026 · Back to text ↑
5. 5
   NCCI form, hosted by the North Carolina Rate Bureau, Workers Compensation and Employers Liability Insurance Policy, WC 00 00 00 C (Part Five, Premium) Checked 13 Oct 2026 · Back to text ↑
6. 6
   Florida Legislature, Florida Statutes 440.10, Liability for compensation Checked 13 Oct 2026 · Back to text ↑
7. 7
   Penn National Insurance, Premium audit questions and answers Checked 13 Oct 2026 · Back to text ↑
8. 8
   Contractors State License Board (CSLB), Workers' compensation requirements Checked 13 Oct 2026 · Back to text ↑
9. 9
   California Legislative Information, Business and Professions Code, article 7.5 (section 7125, version in force and 2028 version) Checked 13 Oct 2026 · Back to text ↑
10. 10
    Contractors State License Board (CSLB), Bond requirements Checked 13 Oct 2026 · Back to text ↑
11. 11
    Contractors State License Board (CSLB), Limited liability company (LLC) licensing Checked 13 Oct 2026 · Back to text ↑
12. 12
    Florida Construction Industry Licensing Board, Rule 61G4-15.003, Public liability insurance Checked 13 Oct 2026 · Back to text ↑
13. 13
    Arizona State Legislature, A.R.S. 32-1152, Bonds and cash deposits Checked 13 Oct 2026 · Back to text ↑
14. 14
    Nevada Legislature, NRS chapter 624, Contractors (sections 624.256 and 624.270) Checked 13 Oct 2026 · Back to text ↑
15. 15
    Washington State Legislature, RCW 18.27.040, Bond or other security required Checked 13 Oct 2026 · Back to text ↑
16. 16
    Washington State Department of Labor & Industries, Register as a contractor Checked 13 Oct 2026 · Back to text ↑
17. 17
    Virginia Board for Contractors / Virginia Administrative Code, 18VAC50-22-60, Requirements for a Class A license Checked 13 Oct 2026 · Back to text ↑
18. 18
    Virginia Board for Contractors / Virginia Administrative Code, 18VAC50-22-50, Requirements for a Class B license Checked 13 Oct 2026 · Back to text ↑
19. 19
    Virginia General Assembly, Code of Virginia 54.1-1100, Definitions Checked 13 Oct 2026 · Back to text ↑
20. 20
    Verisk (ISO), Here's a powerful new pricing tool for general liability insurers (Sept. 29, 2021) Checked 13 Oct 2026 · Back to text ↑
21. 21
    ERGO NEXT, How much does general liability insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
22. 22
    ERGO NEXT, General contractor insurance cost (data updated October 2026) Checked 13 Oct 2026 · Back to text ↑
23. 23
    ERGO NEXT, How much does workers' comp insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
24. 24
    Progressive Commercial, Commercial auto insurance cost Checked 13 Oct 2026 · Back to text ↑
25. 25
    National Association of Insurance Commissioners, Nationwide Marine Definition (model 701) Checked 13 Oct 2026 · Back to text ↑
26. 26
    University of Colorado Boulder, Facilities Management, Supplemental general conditions: builder's risk insurance (rev. 7/2019) Checked 13 Oct 2026 · Back to text ↑
27. 27
    Rhode Island Office of the State Controller, Risk Management, Standard insurance requirements Checked 13 Oct 2026 · Back to text ↑
28. 28
    Idaho Division of Purchasing, Insurance requirements (revised April 29, 2026) Checked 13 Oct 2026 · Back to text ↑
29. 29
    Acquisition.gov (General Services Administration), FAR 28.102-1, Performance and payment bonds: general Checked 13 Oct 2026 · Back to text ↑
30. 30
    The Council of Insurance Agents & Brokers (CIAB), Commercial Property/Casualty Market Index, Q2 2026 Checked 13 Oct 2026 · Back to text ↑
31. 31
    Ivans (Applied Systems), Ivans Index Q2 2026 results Checked 13 Oct 2026 · Back to text ↑
32. 32
    Insureon, Inland marine insurance for contractors (updated Sept. 18, 2026) Checked 13 Oct 2026 · Back to text ↑
33. 33
    ERGO NEXT, How much does commercial property insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
34. 34
    Wyoming Legislature, Wyoming Statutes title 27, W.S. 27-14-108 (extrahazardous employment) Checked 13 Oct 2026 · Back to text ↑
35. 35
    Ohio Bureau of Workers' Compensation / Ohio Administrative Code, OAC 4123-17-03, Calculation of premium (experience modification) Checked 13 Oct 2026 · Back to text ↑

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