Contractor insurance: what you need from day one, what it costs, and what can wait

Published November 4, 2026 · License rules for MA, NJ, MN, ID, VA, IA, LA, CT, NE, New York City, Denver, UT and AR, policy forms and premium data read November 4, 2026 · Pest, septic, well and irrigation license rules for MD, MN, DE and NC read November 8, 2026

• Free. The checklist comes by email as a PDF, a Word file and a Google Doc.
• Deepsel is our product: free estimate, invoice and scheduling software for contractors (scheduling, quotes, invoicing, card payments). Deepsel sells no insurance and doesn't track policies; the section before the FAQ says what it does do.
• Owner quotes come from Reddit threads collected for this series (2024 to 2026) and checked against our list of marketing and seeded accounts. They're owner statements, not a survey.
• Not insurance or legal advice. The license rules come from the boards' and agencies' own pages, read November 4, 2026. Your broker, your policy and your state have the last word.

Buy general liability before the first job, written for every kind of work you actually sell. Add workers comp when you hire; in 12 of the 14 states on our list that means the first employee. Working alone, most of the states on our list let you leave yourself off, some with a form. Louisiana wants a policy anyway, and so does Florida for a sole owner or partner. Add commercial auto if your personal insurer won't put work use in writing, a bond only where your license asks for one, and leave tools cover and an umbrella until you have tools worth insuring or a contract that asks. On price, Insureon's contractor customers pay a median $83 a month for $1 million of general liability. Owners in our threads report $84 a month for a flooring installer and a $488 quote for a general contractor with no employees.

The checklist is three pages. Page 1 is what to buy, one line per policy with blanks for the insurer, policy number, limit, premium and renewal date, plus a box for what your license demands. Page 2 is twelve questions for the broker, a column per sub for the certificates to collect, what GCs and property managers ask you for and the audit file. Page 3 is a renewal calendar. Get it three ways: make your own copy in Google Docs, download the Word version (.docx), or download the PDF. Pick a format, enter your email and I'll send the links.

Why this page. When we read 1,162 threads from contractors in their first year, other owners brought up insurance in 35% of them.¹ One general contractor asked the question this page answers: "What insurance would you buy from Day 1 as a GC if you went back and did it again?"² Search "contractor insurance" and every result is an insurer or broker selling a quote. None of them puts your license's rules next to what owners actually pay, so I did.

What to buy on day one, and what can wait

1. General liability, before the first job. It pays when your work hurts someone who isn't on your payroll or damages someone else's property, including after you've left. It's also the policy license boards check: $500,000 in New Jersey and Louisiana, $1 million in Utah, Denver and for New York City's general contractor registration (the state table has all 13).
2. Workers comp, or your state's paper, when you hire. It pays an injured worker's medical bills and lost wages, and most of our states require it from the first employee. Working alone, you usually leave yourself off; the comp section below has each state's rule.
3. Commercial auto, if your personal policy won't cover the truck at work. The standard personal auto form excludes vehicles used in a business, except a car, pickup or van you own.¹⁰ Many insurers write their own forms and ask how you use the vehicle, so ask yours, in writing, whether driving to jobs and hauling tools and materials is covered. A truck in the company's name, or someone else driving, usually means commercial auto. A New Jersey owner's list for his state: "In NJ we need a business license, workers comp ins, general liability ins and commercial auto ins."⁴
4. A bond, only where the license asks for one. New Jersey, New York City, Virginia's Class A and B licenses and Omaha do, and Iowa for out-of-state firms. A bond isn't insurance for you (more below).
5. Tools and equipment, when losing them would stop work. Brokers call it inland marine. General liability excludes property you own, so your tools sit outside it.⁷ Read what the tools policy counts as a tool. One owner: "I had over 5k worth of battery powered tools stolen out of my truck and they denied it because they don't cover hand tools, only power tools."⁵
6. An umbrella, later. It adds limits on top of general liability and auto. Buy it when a GC or property manager's contract asks for more than your policy carries.

General liability insurance for contractors: what it covers and what it doesn't

Say you redo a bathroom and a supply line you connected lets go a month later, ruining the kitchen ceiling below. The ceiling is the kind of claim general liability is for. Damage that happens after your work is finished falls under the "products-completed operations hazard", which most people call completed operations; check that your policy includes it (Idaho's registration and Minnesota's license require it).^{7, 20, 19}

The bathroom itself is another matter. While the job is under way, the standard policy form excludes "That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it", and once the job is done it excludes damage to your own work, unless a sub did that work.⁷ So tearing out and redoing your own bad work is your cost, not the insurer's. The same form leaves out injuries to your own employees (that's workers comp) and accidents with your vehicles (that's auto).

Why the class on the policy has to match your trades

The insurer prices your policy on a classification for the work you describe. Describe less than you do and you've bought cover for less than you do. A rural general contractor found out how narrow some insurers run: "I tried calling Hiscox and they told me they only cover handyman work." His own list was bathroom and kitchen remodels, plumbing, electrical, roofing, foundation repair, land clearing and excavation.²

The class also sets the price, and the insurer can change it. A Maryland general contractor selling mostly roofing and siding paid "about $8,500/year for GL Insurance" for three years, until "they reclassified us from a "paper contractor" to a "roofing company"" and the premium went to $44,000. Another owner in that thread: "Roofing companies literally pay about 5x more than GC companies because of the risk."⁴ Roofers have their own page on this, roofing insurance and workers comp, with the comp rates by state.

The premium you pay up front is an estimate. The policy form calls it "a deposit premium only", and after the year an audit works out what you owe on your real payroll or sales.⁷ A handyman's advice on the revenue question: "Aim low, dont lie, but aim low."³ Aim too low and the difference comes due as an audit bill.

Exclusions that empty a policy for the work you do

A policy can carry your name and still exclude the job you're on. Endorsements do it. One roofer: "Alot of roofers get a binder for a GL policy to show they have GL insurance but the policy EXCLUDES roofing."⁴ The Construction Financial Management Association's list of exclusions to look for includes blanket exclusions for residential construction, roofing exclusions, and height limits that "remove coverage for work done on buildings in excess of three stories or 35 feet of height".⁸ Another standard endorsement, CG 22 94, takes away the cover for damage to work your subs did, which matters if you sub out most of a job.⁸ These aren't theory. In a Washington case written up in 2024, the court held that a residential construction exclusion barred cover for a worker hurt building a stormwater vault for a new residential subdivision.⁹

So ask for the full policy before you pay, not the quote summary. Find the list of forms and endorsements, read every one with "exclusion" in its title, and hold it against the work you sell. Remodel houses? A residential exclusion empties the policy. Do second-story gutters or siding? Check for a height limit.

Why new contractors get declined, and what to do about it

"I'm a new business. I'm trying to get General Liability insurance coverage but keep getting denied. Why?" That was a pressure washer. He'd applied online: "Every company I have tried has only offered cyber security coverage but declined general liability after going through the questionnaire." A reply explained it: "Most major insurers like GEICO, Progressive, etc… won't be covering this business type. Even NEXT which advertised a lot in service business won't cover pressure washing in many states." A general contractor got the same treatment from the other side: "Progressive dropped me. They told me there aren't enough people in my area using them for general contracting insurance."²

My read on those threads: the online insurers write a short list of trades in each state, and a new business doing anything outside it gets a no. The fix is a broker who quotes several insurers. In the pressure washer's thread: "With a broker It would be very very rare that they can't find you coverage. Whether it's affordable is another question."² If no licensed insurer will take you, a broker can go to the surplus lines market, which exists for risks licensed insurers won't write. Ask which one you're buying. Nebraska's insurance department puts the catch plainly: "There is no guaranty protection for surplus lines policies."¹²

One reply in that thread told him to answer the questions differently. Don't. The policy covers the work it was written for, and a claim or an audit is when the insurer finds out what you really do.

Workers comp has a backstop that liability doesn't: the state's plan of last resort. Nebraska's covers "employers who are unable to secure coverage through the voluntary market."¹³ Your broker can place you in it, at a price: Iowa's 2026 plan rate for residential carpentry is $8.37 per $100 of payroll, against $6.87 on the open market.¹⁵

How much is contractor insurance?

Measured: one broker's customers

Nobody publishes a survey of what small contractors pay. The closest thing is Insureon, an online broker that posts the median premium on policies its own customers bought. Its pages say "average", but the fine print says "Our figures are sourced from the median cost of policies". Those customers chose to shop online through one broker, the figures aren't split by state or size, and they're not your quote.⁶

For the rest, the contractor medians are $270 a month for commercial auto, $42 for tools and equipment, $92 for an umbrella and $9 for a surety bond.⁶ Comp medians mean little for a one-person business, since comp is priced on your payroll.

What owners say they pay

These are owners' own statements from Reddit threads, one per author, not a survey. The general contractor near Houston who started a thread: "They want $488/month. Is this high or reasonable for general liability for a small general contractor operation? No employees." The replies were all over the map. "I pay $84 a month for a million as a floor guy." "I'm at $209/mo smaller GC on my area at $2M last year. However I pay out the ass for workers comp." And a rule of thumb: "For a GC, I have been getting quotes roughly 1% of gross revenue that I do (ie $1M in business = $10k per year)."³

Smaller shops, other trades. A carpentry sub: "$158 a month i think it was. Plus my van ect. It adds up." A lawn care owner: "I paid like $658 or something like that as the yearly premium". A handyman whose state sets high minimums: "it averages out to about $90/mo". And prices move at renewal with no claims: "Was paying $90 then got upped to $150," and another, "Was paying 70 ish a month, then they bumped it to 170".³

How to check a quote

Hold it against the median for your trade in the table, and against 1% of what you expect to sell if you're a general contractor (that's an owner's rule, not a measured one). The Houston quote was $5,856 a year, three times Insureon's general contractor median; for a GC with no employees, I'd have called a second broker. Then budget the premium monthly, the same way you hold back for taxes (the taxes article has the percentage).

Workers comp for contractors: do you need it with no employees?

For yourself, usually not. In most of the states on our list a sole owner, partners and LLC members aren't required to cover themselves, and the state table has each rule. Several states want paper instead of a policy: a $50 coverage waiver in Utah, a filed rejection of coverage in Colorado (Denver's licenses accept it), a line on the registration form in Iowa and Idaho, the state's exemption attestation for a New York City home improvement license, an affidavit to the town with your permit applications in Massachusetts.^{28, 27, 22, 20, 26, 17} Louisiana is one exception. Its contractor board wants proof of comp from every residential and home improvement licensee: "absolutely no exceptions to the WC requirement."²³ Florida is another, for sole owners and partners. Its comp law counts "A sole proprietor who engages in the construction industry and a partner or partnership that is engaged in the construction industry" as employees, so they need a policy. Only corporate officers and LLC members who own at least 10% can file the $50 construction exemption instead, no more than three per company.³⁵

Corporations are different. In New Jersey a corporation needs a policy if anyone works for it, "including corporate officers", and Virginia's comp commission says flatly, "A corporate officer is an employee." New York lets a one- or two-person corporation skip comp only if nobody else works for it, subcontractors included.^{18, 21, 26} If you set up a corporation, ask your broker which rule you're under.

The ghost policy

Sometimes you need a comp certificate with nobody on the payroll: Louisiana's license, or a GC who won't let you on site without one. Owners call the answer a ghost policy, a comp policy that covers nobody. A Louisiana remodeler with no employees got quotes "in the $700 a month area"; the reply: "You need to get a "ghost policy". It's a policy that excludes the owners of the business from coverage... Should cost about $1k per year."⁴ The official rates put a floor under it: a policy with no payroll still pays the class's minimum premium: $916 for residential carpentry in Iowa and $1,200 in New Jersey on the 2026 rates.¹⁵

When you hire

Your exemption covers you, not him. The day a helper starts, you need a policy in every state on our list except Virginia (more than two employees, counting your subs' crews) and Arkansas (two in building work, one if you subcontract). The first-hire article covers what changes then: each state's threshold, the comp rates for six trades, and the rest of the paperwork.

How a workers comp audit charges you for an uninsured sub

Comp premium is a deposit too. After the policy year an auditor counts your payroll and everything you paid subs. Behind that sits the statutory employer rule. Virginia's comp commission: "a contractor bears potential workers' compensation liability for a subcontractor's employees." Colorado's version: "Every person performing construction work on a construction site must be covered", so a business using contractors either covers them or gets proof they're covered.^{21, 27}

The audit rule spells out the bill. In the copy of the standard rule I could read (North Carolina's), you must show that each sub has comp "covering the work performed for the contractor". For each sub who can't, "additional premium must be charged on the contractor's policy", figured on at least 90% of the price for labor only and 50% for labor and material.¹⁴ Other states' manuals differ in detail, so ask your insurer how its audit treats subs.

Here's what that looks like. You pay a framing sub $8,000, labor only, and he has no certificate. At least $7,200 lands on your payroll. At the 2026 rate for residential carpentry that's about $495 more premium in Iowa ($6.87 per $100) and $1,076 in New Jersey ($14.95).¹⁵ Owners learn it the hard way: "I got dinged last audit for a couple thousand dollars." The habit that prevents it: "I require all of my subs to carry their own insurance. If they don't, eventually you'll get audited."⁴

Certificates of insurance: what to collect from subs, and what GCs will ask you for

A certificate of insurance is a one-page summary from the sub's agent. Read its own fine print: it "IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER."¹⁶ So it proves the policy existed on the day it was printed, and that's all. From every sub, before he starts:

• A general liability certificate with you as certificate holder, dates that cover the job, and limits at least as high as your contract with the customer needs.
• A comp certificate, or his state's paper: a waiver in Utah, a rejection of coverage in Colorado, an exemption certificate in New York. A comp certificate looks the same whether the policy covers a crew or nobody, so ask his agent whether the people working on your job are on it.
• His license or registration, looked up on the state's own search, not read off his truck.
• A new certificate when his policy renews. A lapse in the middle of your policy year is the one an audit finds.
• A W-9, a signed sub agreement, and invoices that split labor from material, because the audit rule treats them differently.

Additional insured and waiver of subrogation

Work for a GC, a property manager or a commercial customer and the contract may ask for two things a new contractor rarely knows. A pool service owner: "I have a client that wants to be named as additional insured on our insurance policy before we do equipment work. Has anyone dealt with this?" The first reply: "It's not that uncommon especially with big companies or people who are incorporated."⁵

• Additional insured puts the customer on your policy for claims caused by your work for them. Their name on a certificate isn't enough: the certificate itself says the policy "must be endorsed".¹⁶ The common form covers your "ongoing operations" only, so if the contract asks for completed operations too, ask your broker for that endorsement as well.¹⁶
• Waiver of subrogation. Your policy passes to the insurer any right you have to recover what it paid, so it can sue whoever caused the loss.⁷ A waiver gives that up for the customer named in it, so your insurer can't turn around and sue them.¹⁶

Send the insurance section of any GC contract or property manager vendor packet to your broker before you price the job. The limits, the endorsements and an umbrella, if they want one, are costs of that customer. Plowing and salting contracts ask for both endorsements more often than most, and the snow removal contract template has the insurance and indemnity clauses to send back.

Bonded and insured: how a bond differs from insurance

A new contractor asked the question most do: "How do I go about getting bonds and things like that? How do I know what I'm obligated to pay for?"⁵ A bond is a three-party promise. A surety guarantees to the state or the customer that you'll follow the license law or the contract.¹¹ It protects them, not you. If the bond pays a claim, the surety comes to you for the money; that's what the indemnity agreement sureties ask you to sign is for (the SBA's bond program requires one).¹¹ New Jersey says it directly: after a paid claim you "must promptly replenish" the security.¹⁸ A reply in an electricians' thread put it in six words: "Insurance protects you. Bond protects the client."⁵

License bonds are cheap. One owner "paid a bit over $200 to be fully bonded for a year" in Oregon, and Insureon's contractor customers pay a median $9 a month.^{5, 6} On our list, bonds come from the license in New Jersey ($10,000 to $50,000 of "additional security" by contract size), New York City ($20,000, or $200 into the city's Trust Fund), Virginia (a $50,000 bond in place of the net worth a Class B or A license needs) and Omaha ($10,000), and from Iowa for out-of-state contractors.^{18, 26, 21, 25, 22}

Contractor insurance requirements by state

The 14 states on our new-license list, with New York City and Denver for the two city feeds. Each row is the general or home improvement credential. Trade licenses set their own insurance and bond rules, so check your trade's page in the next-to-last column. Your state's name links to its license page.

Two things the table can't show. A minimum is a floor for the license, and a GC, a property manager or a city permit desk can ask for more. And "none" for the state doesn't mean none for you: an uninsured job that floods a kitchen is paid out of your pocket in every state.

Florida pool and spa contractors

A pool/spa license carries the same $100,000 and $25,000 floor as the other trades in the Florida row. Four things the floor doesn't tell a pool business:

• Comp from the first employee, once you do repairs. Florida treats an employer as construction "when any portion of the employer's business operations is described in" its construction class codes, and code 5223 is "Swimming Pool Construction, Installation, or Repair."³⁶ So a cleaning route that also fixes pumps is a construction employer for everyone on it, and construction needs comp from one employee. Which code covers cleaning with no repairs is your carrier's call.
• Chemicals and the pollution exclusion. The standard liability form excludes injury and damage from a release of "pollutants," which it defines to include "acids, alkalis, chemicals," when you bring them to the site for your work.⁷ Acid and chlorine on a pool truck fit that definition. Ask your agent in writing whether your policy gives chemical releases back, or whether you need a pollution endorsement or a separate policy.
• Draining a pool. The same form excludes damage to "that particular part of real property" you're working on when the damage comes out of that work.⁷ A shell that lifts out of the ground while you have it drained is damage to the property you're working on. A Louisiana pool owner's rule: "If you don't carry a float policy then don't take on the job. Neither your liability insurance or the homeowner's policy is going to cover hydrostatic pressure damage."³⁷ Ask about it before the first drain-and-clean or resurface.
• The truck. A Tampa owner: "Commercial insurance in Florida is nuts. About $7000 per year per vehicle."³⁷ Insureon's median for pool cleaning businesses that quote through it is $250 a month for commercial auto, about $3,000 a year.³⁸ Get the auto quote before you set your monthly price; pool service pricing runs that cost through an 80-pool route.

The insurance certificate the licensing board audits, and the rest of a new license, are on the Florida pool contractor license page.

Insurance and bonds that come with the license in pest, septic, well and irrigation work

Some trade licenses carry their own insurance or bond, set by the agency that issues the license rather than by a contractor board. These are the ones on our newer license lists: Maryland pest control and lawn spraying, Minnesota and Delaware septic, Delaware wells and North Carolina irrigation. The license won't issue or renew without them. For lawn and landscape companies, the spraying and irrigation licenses in every state are in lawn care business license requirements by state.

Three of the five come with a bond, and a bond protects the customer, not you (the section above): a claim paid from it comes back to you through the surety. Minnesota's rule switches the license off the day the policy lapses or drops below the minimum, so set the insurance to auto-renew and keep a certificate with dates that cover the whole license year. The rest of each license is on its own page: Maryland pesticide business license, septic pumping for the Minnesota and Delaware rules, and irrigation pricing for North Carolina.

What sinks a new contractor

• A lapse. In several states the license rests on the policy. Louisiana's coverage "must remain continuously in effect", Minnesota's insurer tells the department when you cancel, Nebraska drops you from its registered list when your comp certificate expires, and Utah wants the policy in force for the whole license.^{23, 19, 25, 28} Pay monthly by auto-pay if you can, and put every renewal in a calendar a month ahead.
• Working outside your class. A claim from work the policy excludes can leave you with no defense and no payment. Work that grew past what you told the insurer can also be reclassified at audit, as the Maryland contractor found.
• An uninsured sub. His crew lands on your comp audit, and if your liability policy carries the subcontractor exclusion, damage to work he did is yours too.
• A surprise audit bill. Both liability and comp premiums are deposits. Estimate payroll and sales honestly, keep payroll by class code, and keep every sub's certificate with dates that cover the days he worked.

How to use the checklist

1. On page 1, tick every kind of work you sell, then fill section B from your license or registration form: the liability minimum, the comp proof or exemption it takes, any bond, the certificate holder.
2. Call two or three independent brokers and ask the twelve questions in section C, starting with the classification and the exclusions.
3. Record each policy in section A as you buy it, with the date you sent the certificate to the board or city.
4. Before any sub starts, fill a column of section D.
5. When a GC or property manager sends a contract, fill a line of section E and send it to your broker before you price the job.
6. Put every renewal in section G with a reminder 30 days ahead, and work through section F before each audit.

More for new contractors

• How to find work as a new contractor: where your first customers come from, with a free first customers plan.
• Angi vs Thumbtack: should you pay for leads yet, with a free lead cost calculator.
• Google Business Profile for contractors: setup, verification and your first reviews, with a free checklist.
• How much to set aside for taxes: self-employment tax, quarterly payments and your state, with a free calculator.
• Hiring your first employee: W-2 or 1099, workers comp and what a helper really costs, with a free checklist.
• Roofing insurance and workers comp: the official comp rates by state for roofers.
• When a customer won't pay, the lien deadlines and a demand letter, by state: Arkansas, Colorado, Connecticut, Florida, Idaho, Iowa, Louisiana, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Utah, Virginia.

Where Deepsel fits

Deepsel doesn't sell insurance, and it doesn't track policies, certificates, renewal dates or audits; keep those on the checklist. Three things in it help. Estimates and jobs hold internal files (PDFs, Word files, photos) that the office and crew see and the customer never does, and an estimate's files follow it onto the job, so a sub's certificate can sit on the job it covers. An internal checklist on the estimate, say "sub's certificates checked, dates cover the job", records who ticked each item and when. Your shop's terms text is copied onto every quote and shows on the customer's quote page, so your license number and "certificate of insurance on request" go out with each one. The Free plan covers 30 estimates and 30 invoices a month for your whole team; Pro is $29 a month for unlimited estimates and invoices. Details are on the pricing page.

Frequently asked questions

How much is contractor insurance?

For general liability, Insureon's contractor customers pay a median $83 a month ($990 a year) for $1 million per occurrence and $2 million aggregate: $61 for electricians, $81 for handymen, $147 for plumbers, $162 for general contractors and $317 for roofers. That's one online broker's own customers, so treat it as a rough guide, not your price. Owners in our threads report $84 a month for a flooring installer, $158 for a carpentry sub and a $488 quote for a general contractor with no employees. Workers comp is priced per $100 of payroll by trade. Commercial auto (median $270 a month), tools cover ($42) and an umbrella ($92) come on top when you need them.

What insurance do I need as a contractor?

General liability before the first job, with every kind of work you sell in its classification. Workers comp when you hire (from the first employee in most states), or your state's exemption paper if you work alone. Commercial auto if your personal insurer won't confirm in writing that work use is covered, and a bond where your license asks for one. Your license may set a liability minimum: $500,000 in New Jersey and Louisiana, $300,000 in Idaho and Minnesota, $20,000 in Connecticut, $1 million in Utah, Denver and for New York City's general contractor registration. Massachusetts asks for adequate insurance without a figure, and Iowa, Virginia, Nebraska and Arkansas set none for the state license.

Do I need workers comp if I have no employees?

In most of the states on our list, not for yourself. Some want paper instead: a $50 waiver in Utah, a rejection of coverage in Colorado, a statement on the registration form in Iowa and Idaho, the state's exemption attestation for a New York City home improvement license. Louisiana's contractor board wants a comp policy from every residential and home improvement licensee, with no exceptions. In Florida construction, a sole owner or partner counts as an employee and needs a policy; only corporate officers and LLC members owning 10% or more can file a $50 exemption. Corporations differ: in New Jersey and Virginia, corporate officers generally count as employees. The day anyone works for you, comp is a different question; our first-hire article covers it.

What does general liability insurance cover for contractors?

Injury to people who aren't your employees and damage to other people's property caused by your work, including after the job is finished (completed operations). It doesn't pay to redo your own faulty work, injuries to your own workers (that's workers comp), accidents with your vehicles (commercial auto) or your own tools (tools and equipment cover). And it only covers the work its classification and endorsements allow, so read the exclusions.

How much does a $1,000,000 general liability policy cost?

Insureon publishes medians for policies of $1 million per occurrence and $2 million aggregate: $83 a month for contractors as a group, with 44% paying under $75 and 78% paying $150 or less. By trade: electricians $61, painters $72, handymen $81, HVAC $101, plumbers $147, general contractors $162, roofers $317. Those are the broker's own customers. Your state, your trade mix, your revenue and your claims move the number.

Why was I denied general liability insurance?

Usually because the insurer you asked doesn't write your kind of work, or not in your state. Owners report online insurers declining pressure washing, dropping general contractors in rural areas, and covering only handyman work. Go to an independent broker who quotes several insurers. If no licensed insurer will take you, a surplus lines insurer may, at a higher price and with no state guaranty fund behind it. Don't change your answers to get a yes: the policy only covers the work it was written for.

What does bonded and insured mean?

Insured means you carry liability insurance (and comp if you have employees), which pays claims against you. Bonded means a surety has guaranteed to the state or the customer that you'll follow the license law or the contract. If the bond pays a claim, the surety comes to you for the money. A license bond is cheap: Insureon's contractor customers pay a median $9 a month. Only some states ask for one; the state table lists them.

Do I need liability insurance if I have an LLC?

Yes. The LLC doesn't pay for the ceiling your work floods; a policy does, and the license minimums apply to an LLC the same as to a sole owner. Buy it in the company's exact legal name: Louisiana's board, for one, wants the insured name on the certificate to match the license. How far an LLC protects your personal assets is a question for a lawyer.

Sources

1. Deepsel research, "Common topics for newly licensed contractors" (doc 8.3): a two-year Reddit corpus of owner threads across trades, 1,162 first-year threads with 16,811 comments, insurance raised by others in 35% of them and asked about in about 80 genuine threads across 9 trades. Compiled November 2, 2026.
2. Reddit, asks and declines: "What insurance would you buy from Day 1 as a GC if you went back and did it again?" (r/Contractor, June 26, 2026, 1ugiv7l); a pressure washer, "I'm a new business. I'm trying to get General Liability insurance coverage but keep getting denied. Why?" and "Every company I have tried has only offered cyber security coverage…", with the replies "Most major insurers like GEICO, Progressive, etc…" and "With a broker It would be very very rare…" (March 20 to 21, 2025, 1jfpo3p); a general contractor, "Progressive dropped me…" and "I tried calling Hiscox and they told me they only cover handyman work." (June 30, 2025, 1lo6gt9). All checked live November 4, 2026.
3. Reddit, prices: "They want $488/month…" with the replies "I pay $84 a month for a million as a floor guy.", "I'm at $209/mo smaller GC on my area at $2M last year…" and "For a GC, I have been getting quotes roughly 1% of gross revenue…" (August 23, 2024, 1ez7x9l); a carpentry sub, "$158 a month i think it was…" (April 18, 2025, 1k2czx7); a lawn care owner, "I paid like $658…" (August 7, 2025, 1mjo94w); a handyman, "it averages out to about $90/mo" and "Aim low, dont lie, but aim low." (October 13, 2026, 1x4is8v); renewals, "Was paying $90 then got upped to $150." and "Was paying 70 ish a month, then they bumped it to 170" (June 30, 2025, 1lo6gt9). All checked live November 4, 2026.
4. Reddit, from our roofing research (quotes checked there): a Maryland general contractor's general liability going from about $8,500 to $44,000 after "they reclassified us from a "paper contractor" to a "roofing company"", and "Roofing companies literally pay about 5x more than GC companies because of the risk." (September 29, 2025, 1ntwk8x); "In NJ we need a business license, workers comp ins, general liability ins and commercial auto ins." (December 5, 2025, 1pegenn); "Alot of roofers get a binder for a GL policy…" (May 4, 2025, mqiwlsu); a Louisiana remodeler on comp quotes and the ghost policy reply (December 30, 2025, 1pzvsfj); "I got dinged last audit for a couple thousand dollars" (June 3, 2026, opl71sq); "I require all of my subs to carry their own insurance…" (March 27, 2025, archived copy, mk39vf7).
5. Reddit, tools, bonds and certificates: "I had over 5k worth of battery powered tools stolen out of my truck…" (July 1, 2025, 1lo6gt9); "How do I go about getting bonds and things like that?…" and, from Oregon, "i think i paid a bit over $200 to be fully bonded for a year" (March 5 to 6, 2025, 1j46phg); "Insurance protects you. Bond protects the client." (March 29, 2025, 1jmo814); "I have a client that wants to be named as additional insured…" and "It's not that uncommon…" (March 27, 2026, 1s52nql). All checked live November 4, 2026.
6. Insureon, cost pages: contractors, "Our figures are sourced from the median cost of policies purchased by Insureon customers", general liability $83 a month ($990 a year) for $1 million / $2 million, "44% pay less than $75 per month and 78% pay $150 or less", workers comp $160, commercial auto $270, inland marine $42, umbrella $92, surety bonds $9, general liability by trade (plumbers $147, general contractors $162, painters $72, electricians $61) (insureon.com); general contractors, $162 ($1,950 a year), comp $196 (insureon.com); construction, roofers $317 (insureon.com); handymen $81, comp $108 (insureon.com); HVAC installation $101, comp $182 (insureon.com); electricians, comp $140 (insureon.com); plumbing, comp $179 (insureon.com). Read November 4, 2026.
7. Insurance Services Office, Commercial General Liability Coverage Form CG 00 01 04 13, copy posted by Sonoma County, California: exclusions e (employer's liability), f(1)(d) (pollution: "pollutants" brought on or to a site "in connection with such operations" by the insured or its subcontractors), g (aircraft, auto or watercraft), j(1) (property you own, rent or occupy), j(5) ("That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations"), j(6) ("That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it") and l (damage to your work, with the subcontractor exception); the "products-completed operations hazard"; condition 5, Premium Audit ("a deposit premium only"); condition 8, Transfer Of Rights Of Recovery Against Others To Us; definition 15 ("Pollutants" mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste"). Exclusions f and j(5) and definition 15 read November 9, 2026. sonomacounty.gov, read November 4, 2026.
8. Construction Financial Management Association, "Signing Off on a General Liability Policy? Beware of Exclusions" (undated): blanket residential construction exclusions, roofing operations exclusions, height limitations "in excess of three stories or 35 feet of height", and CG 2294 (cfma.org); ISO endorsement CG 22 94 10 01, "Exclusion: Damage To Work Performed By Subcontractors On Your Behalf", which replaces exclusion l without the subcontractor exception (iiat.org). Read November 4, 2026.
9. Gerstle Snelson, LLP, "Residential Construction Exclusion Bars Coverage" (March 21, 2024), on Evanston Insurance Co. v. NW Classic Builders, LLC (Washington). gstexlaw.com, read November 4, 2026.
10. Insurance Services Office, Personal Auto Policy PP 00 01 06 94, the copy filed on the Maine Bureau of Insurance site: exclusion A.7, "Maintaining or using any vehicle while that "insured" is employed or otherwise engaged in any "business"", which does not apply to a private passenger auto, a pickup or van you own, or a trailer used with them. An older edition; insurers' current forms vary. maine.gov, read November 4, 2026.
11. Congressional Research Service, "SBA Surety Bond Guarantee Program" (R42037, updated July 18, 2025): "A surety bond is a three-party instrument between a surety … a contractor, and a project owner", and sureties obtain "from each principal a written indemnity agreement" (congress.gov); The Surety & Fidelity Association of America, "What is Surety": "The surety bond protects the obligee" (surety.org). Read November 4, 2026.
12. Nebraska Department of Insurance, Surplus Lines FAQ: surplus lines is a market for "unique or hard-to-place risks", and "There is no guaranty protection for surplus lines policies." (doi.nebraska.gov); NAIC, Surplus Lines (updated October 27, 2025), "non-admitted specialized insurers covering risks not available within the admitted market" (naic.org). Read November 4, 2026.
13. Nebraska Workers' Compensation Court, Employer Frequently Asked Questions: the Nebraska Workers Compensation Insurance Plan covers "employers who are unable to secure coverage through the voluntary market"; the act applies to every employer "employing one or more employees". newcc.gov, read November 4, 2026.
14. North Carolina Rate Bureau, Basic Manual, Rule 2-H, Subcontractors: evidence of comp "covering the work performed for the contractor"; "For each subcontractor not providing such evidence of workers compensation insurance, additional premium must be charged on the contractor's policy"; labor and material "Not less than 50% of the subcontracted price", labor only "Not less than 90%". ncrb.org, read November 4, 2026.
15. NCCI, Iowa advisory rates effective January 1, 2026, class 5645 (residential carpentry) $6.873 per $100 of payroll, minimum premium $916, and $8.371 on assigned risk policies (iid.iowa.gov); New Jersey Compensation Rating and Inspection Bureau, Rate and Classification Handbook effective January 1, 2026, class 5645 $14.946, minimum premium $1,200 (njcrib.com). Read November 4, 2026. The audit example is my arithmetic: $8,000 × 90% × rate ÷ 100.
16. ACORD 25 certificate of liability insurance, sample posted by the NYC Department of Buildings: "THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER" and "If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed." (nyc.gov); ISO CG 20 10 04 13, "Additional Insured: Owners, Lessees or Contractors", sample posted by the NYC Department of Cultural Affairs, covering liability caused by your acts "in the performance of your ongoing operations" (nyc.gov); ISO CG 24 04 05 09, Waiver Of Transfer Of Rights Of Recovery Against Others To Us, posted by the City of Sierra Madre, California (sierramadreca.gov). Read November 4, 2026.
17. Massachusetts: 201 CMR 18.02, "evidence that they maintain adequate contractor insurance", and the Guaranty Fund fee at first registration ($100 for zero to three employees, up to $500) (mass.gov); Department of Industrial Accidents, Workers' Compensation Insurance Requirements: required "no matter the number of hours worked or the number of employees"; LLC members, LLP partners and sole proprietors not required for themselves; officers owning at least 25% may request an exemption (mass.gov); DIA affidavit for builders and contractors (mass.gov). Read November 4, 2026.
18. New Jersey: Division of Consumer Affairs, Home Improvement Contractor FAQ: "$500,000 per occurrence, and workers' compensation insurance, unless exempt by law"; "additional security" of $10,000, $25,000 or $50,000 by contract value; a paid claim must be replenished (njconsumeraffairs.gov); Department of Labor, Employer Requirements: corporations insure if anyone, "including corporate officers", performs services; partnerships and LLCs "excluding partners or members"; sole proprietorships excluding the owner (nj.gov). Read November 4, 2026.
19. Minnesota: Minn. Stat. 326B.86 subd. 2, licensee insurance including products and completed operations, and the insurer's notice to the commissioner on cancellation (revisor.mn.gov); DLI, "There is no minimum number of employees" (dli.mn.gov); Minn. Stat. 176.041 subd. 1, exclusions for sole proprietors, partners, and 25% officers and LLC managers of small businesses (revisor.mn.gov); DLI Residential Contractor FAQs, "The Contractor Recovery Fund replaces bonding requirements" (dli.mn.gov). Read November 4, 2026.
20. Idaho: Idaho Code 54-5210, a comp certificate "or a statement by the contractor as to why such certificate or coverage is not required", and general liability "including products and completed operations … not less than three hundred thousand dollars ($300,000) single limit" (legislature.idaho.gov); Industrial Commission, Employers FAQs: one or more employees, "required to be in place before the first employee is hired", and the owner and officer exemptions (iic.idaho.gov). Read November 4, 2026.
21. Virginia: 18VAC50-22-40, -50 and -60, license requirements for Class C, B and A, with no insurance requirement, and the $50,000 surety bond in lieu of $15,000 (Class B) or $45,000 (Class A) net worth (law.lis.virginia.gov, section 60); Workers' Compensation Commission, Contractor Information: "more than two part-time or full-time employees", subcontractors' employees counted, "A corporate officer is an employee", statutory employer § 65.2-302 (workcomp.virginia.gov); Va. Code 65.2-101, sole proprietors, single shareholders, single-member LLCs and partners included only by election (law.lis.virginia.gov). Read November 4, 2026.
22. Iowa: DIAL, Contractor Registration, out-of-state contractors file a $25,000 bond (dial.iowa.gov); Contractor Registration Application/Renewal Form, box 22, "I have no employees; therefore, I am not required to provide a Worker's Compensation Certificate of Insurance", with no liability insurance question (dial.iowa.gov); Iowa Code 85.1A, proprietors, LLC members and partners "may elect to be covered" (legis.iowa.gov). Read November 4, 2026.
23. Louisiana State Licensing Board for Contractors: memorandum revised July 13, 2026, "at least $500,000 in liability insurance" from August 1, 2026 for residential and home improvement, proof covering "all licensed scopes, with no exclusions for those scopes", the board as certificate holder, and coverage that "must remain continuously in effect" (lslbc.gov); FAQ, "*absolutely no exceptions to the WC requirement", and the insured name matching the applicant (lslbc.gov); checklist for initial license (lslbc.gov). Read November 4, 2026.
24. Connecticut: Department of Consumer Protection, Home Improvement Contractor Application, "general liability insurance of no less than $20,000" (portal.ct.gov); Workers' Compensation Commission, insurance requirements, "With few exceptions, all employers" and "Sole proprietors must accept the provisions of the Workers' Compensation Act" (portal.ct.gov); coverage election Forms 6B, 6B-1 and 75 (portal.ct.gov). Read November 4, 2026.
25. Nebraska: Department of Labor, Contractor Registration: "All contractors with one or more employees must provide a current Workers' Compensation Certificate of Insurance (ACORD 25)", and expired coverage removes a contractor from the list (dol.nebraska.gov); Neb. Rev. Stat. 48-115(9) and (10) (nebraskalegislature.gov); City of Omaha, Licensing Information: insurance $1,000,000 for Class A and B, $500,000 for C, $300,000 for D and E; bond "Minimum of $10,000.00 for all license types" (planning.omaha.gov). Read November 4, 2026.
26. New York City: Department of Buildings, general contractor registration, "you must have a $1 million minimum policy", plus workers' compensation and disability certificates (nyc.gov); Department of Consumer and Worker Protection, Home Improvement Contractor License Application Checklist: a comp certificate naming DCWP or a Certificate of Attestation of Exemption, and Trust Fund enrollment ($200) or a $20,000 surety bond (nyc.gov); New York State Workers' Compensation Board, coverage requirements for for-profit businesses, including the one- or two-person corporation with no other workers "or subcontractors" (wcb.ny.gov). Read November 4, 2026.
27. Denver and Colorado: City and County of Denver, policy 25-DCBC 120A, "for all scopes of work and licensure types", workers' compensation "$100,000 per occurrence and $250,000 aggregate, minimum (or Rejection of Coverage for a contractor with no employees)", general liability "$1M per occurrence and $2M aggregate" (denvergov.org); Colorado Department of Labor and Employment, Coverage Resources: "Every person performing construction work on a construction site must be covered", sole proprietorships and partnerships in construction carry comp or reject it, officers and LLC members need "at least a ten percent ownership interest" to reject (cdle.colorado.gov). Read November 4, 2026.
28. Utah: Utah Admin. Code R156-55a-302d (as in effect August 7, 2026), every license applicant files liability insurance of "at least $1,000,000 for each incident and $2,000,000 in total" with the division as certificate holder, "coverage for the scope of work performed", in force for the whole license, and comp or a Labor Commission waiver; R156-55a-305a, handyman affirmations at $1,000,000 and $3,000,000 (adminrules.utah.gov); DOPL, Specialty Contractor License (commerce.utah.gov); Utah Labor Commission, Workers' Compensation Coverage Waivers, "nonrefundable $50 processing fee" (laborcommission.utah.gov). Read November 4, 2026.
29. Arkansas: Contractors Licensing Board, Residential Builders application (effective January 2025), a comp certificate "If the applicant has one or more employees", with no liability insurance or bond item (labor.arkansas.gov); Workers' Compensation Commission, Basic Facts, "three or more employees … There are exceptions" (labor.arkansas.gov); Ark. Code 11-9-102(11), two or more employees "by any person engaged in building or building repair work", one or more by "a contractor who subcontracts any part of his or her contract" or by a subcontractor (justia.com). Read November 4, 2026.
30. Maryland: Maryland Department of Agriculture, "Pesticide Business Licensing & Certification" - pesticide business license: "Pay a $150 annual business license fee"; "Bodily Injury - $100,000 each person and $300,000 each occurrence"; "Property Damage - $15,000 each occurrence and $30,000 annual aggregate provision"; "An original copy of the current Certificate of Insurance must be kept on file with MDA. The licensing period runs from July 1 through June 30." mda.maryland.gov, read November 8, 2026.
31. Minnesota: Minnesota Rules 7083.1000, subpart 1 (Bonding and insurance for SSTS licensed businesses) - "a minimum of $100,000 of general liability insurance. The minimal amount is not increased for businesses with multiple licenses"; on cancellation or reduction "the license immediately and automatically becomes invalid"; "a corporate surety bond of at least $25,000," revisor.mn.gov; Minnesota Statutes 115.56, subdivision 2(e) - "Licenses may be issued only upon submission of general liability insurance, a corporate surety bond in the amount of at least $25,000"; the bond "may be for both plumbing work and subsurface sewage treatment work," revisor.mn.gov; MPCA, "SSTS business licensing" - renewal with "proof of insurance at least 21 days before your expiration," pca.state.mn.us. All read November 8, 2026.
32. Delaware septic: 7 Delaware Administrative Code 7101-4.0, 4.12.6.1.1.3 - Class F licensees "Operate under a $5,000 performance bond, or other form of security, is maintained on file with the Department for the duration of licensing." law.cornell.edu, read November 8, 2026.
33. Delaware wells: DNREC, "Water Well Licenses" - "All Water Well Contractors and Pump Installer Contractors must carry and maintain the following minimum levels of contractor's liability insurance coverage: Bodily Injury: $100,000 each person $300,000 each occurrence Property Damage: $50,000 each occurrence $50,000 each aggregate"; certificate of liability insurance "designating the Delaware Department of Natural Resources and Environmental Control as the certificate holder"; "All water well licenses expire on December 31 of each year. License renewals must be submitted by Nov. 30 each year." dnrec.delaware.gov, read November 8, 2026.
34. North Carolina: General Statutes 89G-6(a)(4) - the applicant "Files with the Board and maintains a corporate surety bond ... or an irrevocable letter of credit ... in the amount of ten thousand dollars ($10,000)," ncleg.gov; NC Irrigation Contractors' Licensing Board, "How do I obtain a NC Irrigation Contractors' License?" - "A $10,000 Surety Bond and Power of Attorney from a bonding company, or $10,000 Irrevocable Letter of Credit from a bank"; "COPIES WILL NOT BE ACCEPTED," nciclb.org. Both read November 8, 2026.
35. Florida: Florida Administrative Code R. 61G4-15.003 (Construction Industry Licensing Board, last amended November 15, 2007): General and Building Contractor "$300,000" liability and "$50,000" property damage, Residential Contractor and the other listed categories, including "Specialty Contractors, Unless specified otherwise," "100,000" and "25,000," maintained "for the life of an active certificate or registration" (flrules.org); R. 61G6-5.008 (Electrical Contractors' Licensing Board): liability "$100,000/per person $300,000/per occurrence," property damage "$500,000," or a "Minimum combined single limit policy $800,000" (flrules.org); R. 61G4-15.0021(2), the financially responsible officer's bond or irrevocable letter of credit "in the amount of $100,000" (flrules.org). Florida Statutes § 440.02(11) (an LLC member owning at least 10% is an officer), (18)(b)2 (no more than three officers of a construction corporation, each owning at least 10%, may elect exemption), (18)(c)4 (sole proprietors and partners in construction are employees) and (20)(b)2 (construction employment with "one or more employees"), leg.state.fl.us; § 440.05(6) and (8) (exemption certificate valid 2 years; "a fee of $50"), leg.state.fl.us; § 489.115(5)(d) (an applicant relying on an exemption "will obtain an exemption within 30 days after the date the initial certificate or registration is issued"), leg.state.fl.us; §§ 489.131(3)(e) and 489.537(3)(d) (a county or city may require one bond "not to exceed $5,000," conditioned on following the building code), 489.131, 489.537. All read November 9, 2026.
36. Florida pool comp class: Florida Administrative Code R. 69L-6.021, Construction Industry Classification Codes (last amended October 11, 2011): (2) "an employer is engaged in the construction industry when any portion of the employer's business operations is described in the construction industry classification codes that are adopted in this rule"; code 5223, "Swimming Pool Construction, Installation, or Repair". flrules.org, read November 9, 2026.
37. r/PoolPros, quotes checked November 9, 2026: a Louisiana pool owner in "Hydrostatic pressure" (October 28, 2026), "If you don't carry a float policy then don't take on the job. Neither your liability insurance or the homeowner's policy is going to cover hydrostatic pressure damage." (19rsbnxmc2cjm); a Tampa owner (November 6, 2025), "Commercial insurance in Florida is nuts. About $7000 per year per vehicle." (nncwyxl).
38. Insureon, "Pool and Spa Cleaning Services Insurance Costs" (updated September 3, 2026): "Commercial auto insurance : $250 per month"; "Our figures are sourced from the median cost of policies for cleaning businesses that apply for quotes with Insureon." insureon.com, read November 9, 2026.