After you pass - step 9

The Insurance a New Commercial Contractor Needs

Updated September 2026

Two different people will ask you for insurance: the licensing board, which sets a legal minimum, and the general contractor or owner hiring you, who sets a much higher one in the contract. Buy for the second and the first takes care of itself.

General liability

General liability (GL) pays when your work injures someone or damages property that is not yours. State minimums for licensing vary widely - our research found examples from no stated minimum (North Carolina) to $100,000 (South Carolina, Louisiana) to $500,000 per occurrence (Georgia); Tennessee scales the requirement with your monetary limit. Confirm your state's figure on the board page linked from our state guides.

The number that actually matters is the one in the subcontract. Commercial GCs almost universally require $1,000,000 per occurrence and $2,000,000 aggregate, and many want the GC named as an additional insured. A new small contractor commonly pays somewhere in the range of $60-$150 a month for that policy, depending on trade, state, payroll and revenue - get real quotes.

Workers' compensation

Workers' comp pays medical bills and lost wages when an employee is hurt on the job, and it is mandatory once you cross a headcount the state sets. Examples we found: any employee in Louisiana and Tennessee (with exemptions), three or more in North Carolina and Georgia, four or more in South Carolina. Some boards require proof of coverage or a signed exemption with the license application.

Even below the threshold, a GC may refuse to let you on site without a policy or an exemption certificate, and some states will not let an owner exempt themselves on commercial jobs. Ask before you assume.

The rest of the usual stack

• Commercial auto - the personal policy on your truck excludes business use the moment a tool goes in the bed for pay.
• Tools and equipment (inland marine) - covers what walks off the site.
• Builder's risk - covers the structure while you build it; often carried by the owner or GC, sometimes pushed down to you.
• Umbrella - a second layer above GL for the contracts that ask for $5,000,000.

How to get it fast

Online contractor insurers quote GL in minutes from your entity name, trade, revenue estimate and payroll; a certificate of insurance (COI) can usually be downloaded the same day. Get two or three quotes - the spread between carriers for the same coverage is real. Make sure the policy is in the company's exact legal name with the qualifier listed where the board asks for it.

Keep reading

ForemanPrep is an exam-prep company, not a law firm, insurance agency or licensing service. Figures were checked in September 2026 against the sources named; your board's current page is the final word.