best construction insurance companies

Best Construction Insurance Companies for Contractors

If you are going into work as a construction contractor, then you are going to need insurance to protect your business.

This post will explain the different types of construction insurance and the factors that can affect the costs. If you are in search of an insurance company for construction, you will find our recommendations at the bottom of this post useful.

Do You Need Construction Insurance?

If you run a construction business, then yes, your state likely requires you to get construction insurance in order to obtain the license you need to legally perform your work.

Construction business insurance requirements vary from state to state, so you will nee to check your state’s requirements. At a minimum, you usually need general liability insurance. If you have employees, you also will need workers’ compensation (this is true in every state and industry).

Beyond the legal requirements, construction insurance is necessary simply to protect your business. Here are some of the things that can go wrong when you are working in construction:

  • A wood beam you are installing falls on a person or their pet, injuring them.
  • You apply the wrong product to a surface, damaging it.
  • You give a homeowner bad advice, which ends up causing them problems that cost them money.
  • You improperly dispose of a chemical, leading to pollution.
  • A fire damages a project you are working on, and you cannot complete it.
  • Thieves steal some of your expensive tools and equipment.
  • You get into an accident on the road as you are driving to a worksite. Your work vehicle, and/or equipment could be damaged or destroyed.
  • One of your workers gets into an accident on the job, resulting in serious injury and time out of work.

Any one of these situations could lead to serious financial losses on your part if you do not have insurance to cover the damages. In fact, the costs related to construction accidents and mistakes can soar high enough to completely wipe some businesses out. That is why it is so important to get insurance for your company.

Types of Construction Insurance

Let’s go over the most common types of construction insurance now that you know why insurance is so important in this industry.

  • General liability insurance: If you damage another person or their property, you can cover the associated legal or medical costs using general liability insurance. Your state likely mandates that you carry a general liability insurance policy with a specified minimum amount of coverage.
  • Errors and omissions insurance: If you give out bad advice or you are negligent in other ways, customers might sue you. When that happens, you can fall back on this type of coverage, also called “professional liability insurance” for construction contractors.
  • Commercial property insurance: Insuring your own property requires a commercial property insurance policy. The general liability policy will only cover property belonging to other people.
  • Commercial auto insurance: To cover the vehicle you use to drive to and from worksites, you need to buy a commercial auto insurance policy.
  • Business owner’s policy: This is a type of policy that combines general liability insurance with another type of insurance, usually commercial property insurance.
  • Contractor’s tools and equipment insurance: Construction tools and equipment not only can be expensive and hard to repair or replace, but they also are what you rely on to keep your business going every day. Make sure you purchase this type of policy to protect them.
  • Workers’ compensation: Legally, you must purchase workers’ comp if you employ even a single person. It will pay out if your worker gets sick or injured on the job. It can cover lost wages and medical bills.
  • Specialized forms of construction insurance: In addition to the common types of policies above, some carriers offer additional types of policies that are specific to the construction industry. These include contractors’ pollution liability insurance, contractors’ professional and protective indemnity insurance, installation insurance and more. You can even find policies that are specific to niches within the construction industry such as railroad protective liability insurance.  

How Much Does Construction Insurance Cost?

According to Insureon, the average cost for construction insurance is $960 per year, which comes out to $80 per month. But construction insurance can sometimes be more or less expensive. Familiarizing yourself with the factors that can affect construction insurance costs can help you to save money.

  • Types of coverages you buy: All other factors being equal, if two different construction companies decide to buy vastly different policies, their costs are going to be vastly different. Maybe Company A purchases general liability insurance and workers’ comp and that is it. Company B purchases both of these, errors and omissions insurance, a commercial auto policy and a tools and equipment policy. You can expect Company B to pay more.
  • Policy amounts: If you want an insurance company to pay out to a higher maximum if something goes wrong, then you are going to need to pay higher monthly amounts.
  • Deductibles: The deductible for an insurance policy is the amount a business owner has to pay before the insurance company starts paying. A higher deductible can be your ticket to lower monthly costs. Of course, it does entail more risk for you.
  • Types of construction work you perform: If you perform especially dangerous construction work—like working on rooftops or high rises—then your rates for insurance will be more expensive than if you were performing less risky types of work.
  • Locations where you work: As with other types of businesses, construction businesses that operate in relatively safe areas may be less expensive to insure than those that do not.
  • Size and scope of your business: If you operate a small construction business with a handful of employees who work in a small rural area, your business risks are lower than if you operate a large construction business in a major metropolitan region. Factors like these can impact your insurance rates.
  • Payroll: As we have talked about, it is necessary to get workers’ compensation if you have employees. The higher your payroll, the more your workers’ comp will cost. This may reflect a larger number of employees, higher salaries to cover if there is time out of work, or both.
  • Bundles and discounts: Insurance companies that cover construction businesses sometimes offer discounts, especially to customers who bundle together policies.
  • Your claims history: It is in your interest to avoid making insurance claims when possible. Every claim that goes on your record marks you out as a risky customer. The more risk is associated with your profile, the more expensive your insurance costs can be. If you can keep your record clean, especially over many years of operating, it may help you minimize your insurance costs.
  • Experience: How much experience do you have in construction? If you have been working in this industry for years now, that suggests you have learned safe practices. But if you are just starting up with it, then you may not yet know how to avoid many of the job’s hazards. Insurance companies consider this when they are giving you quotes.
  • Underwriting guidelines: Depending on how underwriting works at a particular insurance company, they may offer you higher or lower insurance rates than another company that underwrites differently.

Top Construction Insurance Providers

Now that you understand more about shopping for construction insurance policies, we can take a look at some of the top insurance carriers for construction.

1. Progressive

progressive commercial

Many people use Progressive for their home and auto policies. But you can also count on this insurance giant to provide you with great rates on commercial insurance policies, including coverages in the construction industry. Here are some of Progressive’s construction policies:

  • General liability
  • Commercial auto
  • BOP
  • Workers’ comp

Progressive has a lot of discounts available, so be sure to ask whether you can save through bundling or other practices.

2. The Hartford

If you are in the market for really specific types of coverages for construction, you are going to want to check out what The Hartford has to offer. This insurance carrier’s numerous specialty policies help you close all of your loopholes to protect your business. Many of these types of policies are not widely available elsewhere. Here are the types of construction insurance offered by The Hartford:

  • General liability insurance
  • Workers’ compensation insurance
  • CPPI+
  • OPPI+
  • Owner’s and contractor’s protective liability
  • Railroad protective liability
  • Builder’s risk insurance 
  • Contractor’s equipment coverage
  • Installation coverage 
  • Wrap-up 
  • Cyber liability insurance
  • Contractors Pollution Liability
  • Construction Surety Bonds


NEXT is an insurance carrier with a focus on the needs of small business owners. To help construction businesses protect themselves, they offer these types of policies:

  • General liability insurance
  • Errors and omissions insurance
  • Workers’ compensation
  • Commercial auto insurance
  • Tools and equipment insurance

NEXT lets you save up to 25% in discounts, and makes the application and approval process fast and easy. You can take care of it online and receive instant proof of insurance.

Get Personalized Quotes for Construction Insurance

With construction insurance, you can ensure that your business continues to run smoothly, and that the many hazards of the industry do not put a damper on your profits. To protect your business now, click on any of the links in this post to request quotes from our recommended carriers.

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