Contractor insurance costs depend on factors such as your company’s history, location, niche, policy terms, and the size of the business. It’s ultimately bespoke to your company and requires a proper assessment of your needs.

You can visit APOLLO Insurance to get a quote for contractor insurance in under five minutes.

This article discusses what factors affect your premiums, the benefits of general liability insurance, and how you can purchase a policy today.

What factors determine the cost of general liability insurance?

Company claims and legal history: Your claims and lawsuit history are significant determinants of your premiums. Insurers deem companies with a history of lawsuits, complaints, and insurance claims a higher risk and charge a higher premium.

General liability insurance protects against lawsuits and financial liabilities. Numerous prior lawsuits against your business may reveal a pattern of negligence or other red flags. As a result, covering the financial liability of suits against your company may be risky to an insurer.

Location: Areas with high crime rates or severe weather patterns might see higher insurance rates. These factors create risks for any business, leading to financial or legal liability. Insurers ultimately take this into account to determine your premiums.

Niche and classification: Contractors don’t do anything and everything. There are niches, such as those who specialize in renovations, manage commercial spaces, or build homes from the ground up. Each niche comes with its own risks — some with more than others. As a result, your industry or niche may affect your premiums for better or worse.

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Another factor is whether you’re a general contractor or subcontractor. Both roles carry their own problems. Your subcontracting work could also factor in — an HVAC technician ultimately has different risks than a drywaller.

Coverage limit: You can expect a higher premium with a higher coverage limit. However, sufficient coverage is well worth it because your policy can only pay up to its limit.
Suppose a client sues for $1.5 million, and your policy limit is $1 million. You may need to pay that difference out-of-pocket. It’s vital to purchase a policy with a limit appropriate to your anticipated risks.

Coverage scope: Not all general liability policies are built the same. Some policies provide specific exclusions or limits. Of course, for the right price, insurers let you customize these limits and exclusions to accommodate your business needs.

Deductible: A deductible is an amount you pay to make a claim—the lower your deductible, the higher your premiums.

Deductibles can range from $0 to $3,000 or more. They create an obstacle to making insurance claims and force you to think twice before making a claim.

Size of business: Bigger businesses, with more employees and larger projects, have higher premiums. It’s simply that companies with considerable workers and clients have more risks. This makes it harder for the insurer to cover the business, resulting in a higher premium.

Related: What does contractor’s insurance cover


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What are the benefits of general liability insurance for contractors?

1. Protect yourself from financial liability

General liability insurance, first and foremost, protects your business from lawsuits. It covers situations where a client or third-party faces a bodily injury or property damage and sues you for compensation. General liability insurance manages the financial fallout of this situation by paying for legal fees, damage awards, and out-of-court settlements.

For example, suppose you’re renovating a kitchen. In the process, you accidentally damage your client’s fridge. General liability coverage can protect against any financial fallout resultant of this accident.

In another example, a client might come to view the work so far. While on the job site, a nail or cord that’s left lying around injures the client. A serious injury could lead to medical costs and compensation for lost wages and pain and suffering. Again, general liability insurance can cover such consequences.

2. Handle accidents quickly and effectively

General liability insurance lets you handle unfortunate incidents quickly and effectively. Without coverage, you might argue with clients and third parties about who’s at fault. You obviously don’t want to pay tens of thousands of dollars out of pocket as compensation!

But insurance lets you handle the issue in a professional manner. If you take the blame, it goes through your insurance, and your policy pays damages and compensation. As a result, you’re not fighting over responsibility.

For this reason, clients, especially larger ones, may mandate you have insurance before they’re ready to hire you.

Related: What is general liability insurance for contractors

How to buy general liability insurance as a contractor

You can get a quote and purchase general liability insurance for contractors with APOLLO Insurance in under five minutes. You won’t even need to leave your home or office! Quote, purchase, and bind your policy entirely online, 24/7, and from any device.

If you need help, our expert insurance advisors are available over live web chat and phone to answer questions and determine your business risks.


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