What are the general contractor insurance requirements

May 17, 2023

General contractor insurance is an essential component of every construction project. Its purpose is to shield the contractor, their employees, and the customer from potential liabilities that may develop throughout the project. Therefore, general contractor insurance requirements are important to any construction project. General contractors must provide this coverage to safeguard their company, staff, and clients. 

What do General Contractor Insurance Requirements Entail?

The general contractor insurance requirement varies by state and business type. However, general contractors’ insurance requirements should include liability insurance, which protects a customer's property, and workers’ compensation coverage, which covers medical expenses, lost wages, and other benefits for employees injured at the work site.

General Liability Insurance

Regarding protecting their business, general liability insurance is one of the most crucial general contractor insurance requirements contractors can have. General liability insurance protects a contractor’s legal obligations in the event that they are held accountable for accidents or property damage that arises due to their work. General liability insurance also covers claims of carelessness or suspected negligence and failure to complete work as defined in a contract. This sort of insurance is required for general contractors since it protects them from a wide range of potential risks and liabilities.

Workers’ Compensation Insurance

General contractor insurance requirements consider workers’ compensation insurance a must. It is a sort of insurance that gives financial and medical benefits to employees who get injured or become ill on the job. Workers’ compensation insurance protects contractors against the high costs of legal fees, missed payments, and medical expenses resulting from workplace injuries. Contractors must offer a safe working environment for their employees and workers’ compensation insurance coverage. Read more: builders risk insurance cost.

Comprehensive Automobile Insurance

Comprehensive Automobile insurance is a must-have for any contractor who employs their vehicles for business purposes. This sort of insurance covers a wide range of potential losses associated with using a company car, including liability for accidents or damage caused by the vehicle and damage to the vehicle itself caused by collision, fire, theft, or other risks. It can also cover medical bills incurred due to an accident and legal fees related to defending a case.

Disability Benefits Coverage Insurance

Another vital requirement for general contractors is disability benefits insurance coverage, which protects employees who become disabled in the workplace due to illness or injury. Disability benefits insurance assists in covering the costs of missed wages, medical expenditures, and daily living expenses. This protection can be availed through an employer-sponsored group policy,  an individual policy, or from a government program. For more details visit Summit Cover.


Overall, the general contractor insurance requirements include a comprehensive business liability policy. This policy is intended to protect contractors from claims against them for injuries or damages sustained on the job. General contractor insurance is a must-have for any contractor in the construction sector. However, before signing up for coverage, contractors should understand the benefits and restrictions of their insurance. This insurance is critical for contractors because it can protect them from potential litigation and financial losses.

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