Contractor business insurance costs vary based on coverage type, helping you plan your budget effectively. MoneyGeek's analysis shows monthly premiums range from $63 for professional liability to $378 for a business owner's policy.
How Much Does Contractor Business Insurance Cost?
Contractor business insurance starts at $63 per month, but your specific business details and coverage needs will determine your actual rate.
Discover cheap contractor business insurance below.
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Updated: August 19, 2025
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Key Takeaways
Contractor business insurance costs range from $63 to $378 monthly, depending on your coverage type.
Your contractor insurance premiums depend on location, claims history, property types serviced and employee count.
Shop multiple insurers, bundle policies, increase deductibles and pay annually to find affordable contractor business insurance costs.
Average Contractor Business Insurance Cost Overall
| BOP | $378 |
| General Liability | $256 |
| Professional Liability (E&O) | $63 |
| Workers' Comp | $166 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus on four coverage types: general liability, professional liability/E&O, workers' comp and business owner's policy. Survey results reflect limited sample data and may not represent all available rates in your area.
Contractor Business Insurance Cost for General Liability Coverage by State
Your contractor business insurance costs for general liability coverage depend on where you operate. North Carolina offers the most savings at $222 monthly (versus the $256 national average), while New York costs $298 monthly, giving you concrete data for business planning.
| Alabama | $251 |
| Alaska | $225 |
| Arizona | $242 |
| Arkansas | $246 |
| California | $285 |
| Colorado | $254 |
| Connecticut | $278 |
| Delaware | $275 |
| Florida | $277 |
| Georgia | $260 |
| Hawaii | $263 |
| Idaho | $243 |
| Illinois | $281 |
| Indiana | $250 |
| Iowa | $244 |
| Kansas | $249 |
| Kentucky | $237 |
| Louisiana | $285 |
| Maine | $222 |
| Maryland | $244 |
| Massachusetts | $269 |
| Michigan | $243 |
| Minnesota | $240 |
| Mississippi | $257 |
| Missouri | $253 |
| Montana | $255 |
| Nebraska | $242 |
| Nevada | $290 |
| New Hampshire | $255 |
| New Jersey | $290 |
| New Mexico | $258 |
| New York | $298 |
| North Carolina | $222 |
| North Dakota | $223 |
| Ohio | $238 |
| Oklahoma | $237 |
| Oregon | $238 |
| Pennsylvania | $296 |
| Rhode Island | $281 |
| South Carolina | $264 |
| South Dakota | $239 |
| Tennessee | $250 |
| Texas | $258 |
| Utah | $243 |
| Vermont | $246 |
| Virginia | $233 |
| Washington | $291 |
| West Virginia | $269 |
| Wisconsin | $251 |
| Wyoming | $237 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on general liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Contractor Business Insurance Cost for Workers’ Compensation Coverage by State
Your Contractor business insurance cost for workers' compensation varies by state. North Carolina offers the lowest rates at $142 monthly and New York the highest at $193 monthly. Our analysis reveals how state regulations and claim histories create these differences.
| Alabama | $163 |
| Alaska | $152 |
| Arizona | $156 |
| Arkansas | $157 |
| California | $185 |
| Colorado | $164 |
| Connecticut | $179 |
| Delaware | $179 |
| Florida | $177 |
| Georgia | $169 |
| Hawaii | $173 |
| Idaho | $157 |
| Illinois | $180 |
| Indiana | $162 |
| Iowa | $157 |
| Kansas | $160 |
| Kentucky | $155 |
| Louisiana | $188 |
| Maine | $144 |
| Maryland | $158 |
| Massachusetts | $173 |
| Michigan | $158 |
| Minnesota | $156 |
| Mississippi | $165 |
| Missouri | $165 |
| Montana | $165 |
| Nebraska | $157 |
| Nevada | $189 |
| New Hampshire | $165 |
| New Jersey | $188 |
| New Mexico | $167 |
| New York | $193 |
| North Carolina | $142 |
| Oklahoma | $154 |
| Oregon | $154 |
| Pennsylvania | $191 |
| Rhode Island | $183 |
| South Carolina | $170 |
| South Dakota | $155 |
| Tennessee | $160 |
| Texas | $167 |
| Utah | $159 |
| Vermont | $159 |
| Virginia | $152 |
| West Virginia | $174 |
| Wisconsin | $164 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on workers’ comp policies. Workers' compensation requirements vary by state and are mandated by state regulations. Survey results reflect limited sample data and may not represent all available rates in your area.
Contractor Business Insurance Cost for Professional Liability Coverage by State
Like other types of coverage, your cost for professional liability varies by state. The national average is $63 monthly, with North Carolina offering the lowest rates at $55 for E&O insurance, while Pennsylvania has the highest at $74 monthly.
| Alabama | $63 |
| Alaska | $62 |
| Arizona | $60 |
| Arkansas | $59 |
| California | $71 |
| Colorado | $63 |
| Connecticut | $69 |
| Delaware | $67 |
| Florida | $69 |
| Georgia | $64 |
| Hawaii | $68 |
| Idaho | $60 |
| Illinois | $71 |
| Indiana | $62 |
| Iowa | $60 |
| Kansas | $61 |
| Kentucky | $58 |
| Louisiana | $71 |
| Maine | $55 |
| Maryland | $61 |
| Massachusetts | $67 |
| Michigan | $59 |
| Minnesota | $59 |
| Mississippi | $63 |
| Missouri | $63 |
| Montana | $63 |
| Nebraska | $60 |
| Nevada | $73 |
| New Hampshire | $63 |
| New Jersey | $71 |
| New Mexico | $64 |
| New York | $72 |
| North Carolina | $55 |
| North Dakota | $56 |
| Ohio | $58 |
| Oklahoma | $61 |
| Oregon | $59 |
| Pennsylvania | $74 |
| Rhode Island | $69 |
| South Carolina | $64 |
| South Dakota | $58 |
| Tennessee | $62 |
| Texas | $63 |
| Utah | $60 |
| Vermont | $61 |
| Virginia | $57 |
| Washington | $72 |
| West Virginia | $67 |
| Wisconsin | $61 |
| Wyoming | $58 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on professional liability policies. Survey results reflect limited sample data and may not represent all available rates in your area.
Contractor Business Insurance Cost for BOP Coverage by State
Business owner's policy rates show significant state-by-state variation for contractor insurance costs. For example, coverage in Pennsylvania costs $439 per month, while North Dakota contractors pay just $330 monthly.
| Alabama | $372 |
| Alaska | $325 |
| Arizona | $356 |
| Arkansas | $360 |
| California | $427 |
| Colorado | $381 |
| Connecticut | $411 |
| Delaware | $400 |
| Florida | $408 |
| Georgia | $392 |
| Hawaii | $377 |
| Idaho | $366 |
| Illinois | $412 |
| Indiana | $367 |
| Iowa | $357 |
| Kansas | $364 |
| Kentucky | $349 |
| Louisiana | $414 |
| Maine | $326 |
| Maryland | $367 |
| Massachusetts | $398 |
| Michigan | $365 |
| Minnesota | $355 |
| Mississippi | $383 |
| Missouri | $370 |
| Montana | $380 |
| Nebraska | $355 |
| Nevada | $428 |
| New Hampshire | $383 |
| New Jersey | $427 |
| New Mexico | $384 |
| New York | $435 |
| North Carolina | $332 |
| North Dakota | $330 |
| Ohio | $349 |
| Oklahoma | $349 |
| Oregon | $350 |
| Pennsylvania | $439 |
| Rhode Island | $418 |
| South Carolina | $384 |
| South Dakota | $358 |
| Tennessee | $372 |
| Texas | $377 |
| Utah | $355 |
| Vermont | $362 |
| Virginia | $342 |
| Washington | $424 |
| West Virginia | $400 |
| Wisconsin | $369 |
| Wyoming | $358 |
How did we determine these rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on BOP coverage. Survey results reflect limited sample data and may not represent all available rates in your area.
Factors Affecting Contractor Business Insurance Cost
Insurance companies look at several factors to determine your contractor business insurance costs. Understanding these elements helps you plan your budget better. Here's what affects your insurance rates.
Geographic location
Your business location affects workers' compensation rates due to local regulations and claim frequencies. Operating in tornado-prone areas or high-crime neighborhoods increases your risk profile, and state differences create substantial premium variations.
Safety record and claims history
Previous claims impact future premiums, sometimes for three to five years. A single slip-and-fall lawsuit can substantially increase your general liability rates at renewal.
Types of properties serviced
Commercial buildings, residential properties and industrial sites each present unique liability risks. Working on high-value properties or in hazardous environments like industrial facilities typically results in higher insurance premiums than residential contracting.
Employee count and payroll
Insurers calculate workers' comp premiums based on your total payroll and job classifications. Adding employees increases your payroll costs, directly impacting your workers' compensation premiums since insurers calculate your rates per dollar of wages paid.
Services offered
Electrical work, roofing, and structural alterations carry higher insurance costs than interior renovations or finishing work. Each specialized service adds unique risks that affect your premium calculations.
Business size and revenue
Higher annual revenue typically means higher premiums since insurers view larger operations as having greater exposure to claims. A solo contractor earning $50,000 annually pays less than a commercial contractor with $500,000 in revenue.
Coverage limits
Higher coverage limits provide better protection but cost more monthly. Choosing between different coverage amounts directly affects your premium, with higher limits increasing costs proportionally.
Equipment and vehicle values
More expensive construction equipment and specialized tools require higher coverage limits, increasing your premiums. A company using heavy machinery and commercial vehicles needs more coverage than one using basic hand tools.
Credit score and financial stability
In most states, insurers can consider your business credit score when setting rates. A strong credit score can reduce premiums, while poor credit often increases costs substantially.
How to Get Cheap Contractor Business Insurance
Smart shopping and improved business practices can help reduce your contractor insurance costs. Here are proven strategies to lower your premiums now and build a stronger risk profile over time.
- 1
Choose the right coverage types for your business
Understanding what types of business insurance your contracting business needs prevents overpaying for unnecessary coverage. Focus on essential policies like general liability for third-party injuries and property damage. Consider workers compensation if you have employees and commercial property coverage to protect your tools and equipment.
- 2
Shop multiple insurance companies
Insurance rates can vary significantly between providers for the same coverage. Compare quotes from at least three insurers to find the best rates. Consider working with an independent agent who can shop multiple carriers for you.
- 3
Bundle your coverage types
Insurance companies often offer substantial discounts when you bundle multiple policies together. Combining general liability, commercial property and commercial auto insurance with one provider typically costs less than separate policies from different insurers.
- 4
Increase your deductibles
Choosing higher deductibles reduces your monthly premium costs. This means you'll pay more out of pocket when filing a claim, but your regular insurance payments will be lower. Make sure you can afford the higher deductible amount if you need to file a claim.
- 5
Pay annually instead of monthly
Most insurance companies charge extra processing fees for monthly payments. Paying your premium annually eliminates these fees and often qualifies you for additional discounts. This upfront payment can lead to significant savings over time.
- 6
Review and adjust your coverage annually
Your insurance needs change as your business grows. Review your coverage yearly to ensure you're not paying for unnecessary protection. Update your policies as you add employees, acquire new equipment or expand your services.
Insurance for Contractor Business Cost: Bottom Line
Contractor business insurance costs range from $63 to $378 monthly, with your location, claims history and business size driving your actual premium. Getting quotes from multiple insurers, bundling your policies, choosing higher deductibles and paying annually instead of monthly helps you find more affordable rates.
Contractor Business Insurance Cost: FAQ
Business owners ask many questions about contractor business insurance costs, so we gathered answers to the most common questions below.
What is the cheapest type of contractor business insurance?
Professional liability insurance costs $63 monthly, but it only covers errors and omissions in your work. Most contractors need general liability insurance to protect against customer injuries and property damage claims.
How much can I save by bundling my contractor business insurance policies?
Bundling policies through a business owner's policy (BOP) offers the best value for contractor companies, combining essential coverages while saving money compared to purchasing separate policies.
What factors make my contractor business insurance more expensive?
Geographic location, safety record, claims history and types of properties services can make business insurance expensive for contractors.
Should I choose a $500 or $2,500 deductible for my contractor business insurance?
A higher deductible ($2,500) lowers your monthly premiums, but requires more cash on hand when filing claims. Consider your financial stability and claim frequency when deciding.
How much does workers' compensation cost for contractor businesses by state?
Workers' compensation costs for contractors range from $142 monthly in North Carolina to $193 monthly in New York, with rates varying based on your business location.
Is business owner's policy (BOP) worth the extra cost for contractor companies?
A business owner's policy costs $378 monthly and combines essential coverages into one package. This bundled approach saves money compared to purchasing separate policies for contractors.
How often should I shop around for contractor business insurance quotes?
Review your contractor insurance annually during renewal. Compare at least three insurers to find better rates, particularly if your business has grown or changed services.
How We Determined Contractor Business Insurance Costs
We collected contractor business insurance quotes from companies across different states. For consistent comparisons, every quote used the same business setup:
- Two employees (three people total, including the owner)
- $150,000 annual payroll
- $300,000 annual revenue
- Already insured status
- $1 million per occurrence and $2 million total per year for all coverage except BOP, which includes the same limits plus $5,000 business property coverage
This profile represents small contractor businesses requiring comprehensive insurance coverage in most states. We chose companies offering broad national coverage and online quote capabilities, focusing on insurers that actively serve the contractor industry.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.