General liability (GL) insurance is the foundation of any contractor's insurance program. It covers third-party bodily injury, property damage, and completed operations — and it's required by virtually every general contractor, property owner, and public agency before you set foot on a job site.
But how much does it actually cost? The honest answer: it depends. Here's a breakdown of what drives the price and what California and Western US contractors typically pay.
Average General Liability Costs for Contractors
Most small to mid-sized contractors pay between $500 and $3,000 per year for a basic general liability policy. That said, specialty trades and higher-risk contractors can pay significantly more.
Here are some rough ballparks by trade:
- Handyman / light maintenance: $500 – $1,200/year
- Painting contractor: $800 – $1,800/year
- Plumbing contractor: $1,200 – $3,000/year
- Electrical contractor: $1,500 – $4,000/year
- General contractor: $2,000 – $6,000+/year
- Roofing contractor: $3,000 – $10,000+/year
These are starting points — your actual premium depends on several factors below.
What Factors Affect Your Premium?
1. Trade / Contractor Type
Roofers, demolition contractors, and foundation specialists pay more than painters or landscapers because the risk of injury or damage is statistically higher. Insurers classify every trade and price accordingly.
2. Annual Revenue
General liability is largely priced based on your revenue or payroll. More work = more exposure = higher premium. A contractor doing $200K/year in revenue pays considerably less than one doing $2M/year.
3. Coverage Limits
The most common limit structure is $1M per occurrence / $2M aggregate. If a job requires $2M/$4M limits, expect your premium to increase by roughly 25–50%.
4. Claims History
A clean loss history gets you better rates. If you've had claims in the past 3–5 years, carriers will price that risk into your premium — or decline to quote altogether.
5. State
California tends to run higher than Nevada, Utah, or Arizona due to litigation costs and labor laws. Texas and Arizona are typically more competitive markets.
6. Subcontractor Use
If you regularly hire uninsured subs, many insurers will either charge more or exclude their work from your coverage. Requiring your subs to carry their own GL protects you and can lower your premium.
What Does General Liability Cover?
- Bodily injury: A client or bystander gets hurt on your job site
- Property damage: You or your crew accidentally damage a client's property
- Completed operations: A problem caused by your work shows up after the job is done
- Personal & advertising injury: Claims of libel, slander, or copyright infringement
What's Not Covered?
General liability does NOT cover your employees if they're injured (that's workers' comp), your tools and equipment (that's inland marine), or damage to your own work that needs to be redone (that's a separate coverage). It also typically excludes professional errors on design-build projects — for that you'd need professional liability.
How to Get the Best Rate
- Work with an independent broker who can shop multiple carriers
- Bundle GL with commercial auto or workers' comp for a package discount
- Maintain a clean loss history — even small claims add up
- Require certificates of insurance from any subcontractors you hire
- Be accurate when describing your work — misclassification can void your policy
Ready to Get a Quote?
Altamira Insurance works exclusively with contractors. We shop top-rated carriers to find you the right coverage at a competitive rate. Request a quote online or call us — we typically turn quotes around the same day.