Insurance for Year-One Contractors
General Liability for New Contractors & Startups
Starting a contracting business this year? Here is the playbook: how much GL you need to get licensed, how carriers price you without history, how to bind coverage in 24 hours, and the five mistakes that quietly torch new contractors in year one.
- ✓Minimum coverage to get licensed in your state
- ✓How premiums are set without loss history
- ✓Same-day COIs to bid your first jobs
- ✓Top mistakes new contractors make in year one
✓ 20+ Years Experience
✓ Same-Day COI
✓ Licensed All 50 States
Or call (234) 231-8427 — Mon–Fri, 9 AM–5 PM EST
What New Contractors Actually Need to Get Started
Starting a contracting business in your first year is mostly a paperwork sprint. Before you can hand a single estimate to a customer or set up a job site, you need: an LLC or sole prop registration, an EIN, a business bank account, a state contractor license (for licensed trades), a city or county business license, and — the piece almost every new contractor stumbles on — a current general liability insurance certificate. General liability insurance for new contractors is not just legally required by most state boards, it is a practical gatekeeper: GCs, property managers, and homeowner associations will not let you on the property without one. Learn more about general liability insurance for contractors or scroll down for the details on this question.
The good news is that buying GL as a brand-new contractor is fast, cheap, and not nearly as complicated as new owners assume. Most carriers have streamlined new-venture programs that bind in 24-48 hours with no loss runs, no inspection, and a one-page application. The bad news is that the cheapest available policy is rarely the right one, because new-contractor markets quietly add restrictive endorsements — faulty-workmanship exclusions, total mold exclusions, low aggregate limits — that look harmless on paper and very harmful on claim day.
This page walks through exactly what a new contractor needs in year one: the minimum legal limits, the practical limits real GCs require, the realistic cost ranges, the ten-minute quote process, the documents you will need before you call us, and the five mistakes we see new contractors repeat every season. Read it once and you will know more about contractor insurance than 80% of your competition.
First-Year Coverage Stack
For most new contractors, the year-one stack is: $1M/$2M general liability, workers’ comp from your first W-2 employee, commercial auto on every business vehicle, and a $1M umbrella to satisfy bigger contracts. Total: typically $2,000-$6,000/year for solo operators in low-hazard trades; more for crews and high-hazard work. We quote the whole stack in a single 15-minute application.
Why “Cheap First-Year Policy” Is Often a Trap
New contractors are a target market for direct-to-consumer insurance startups that promise “$39 a month” GL. Those policies frequently strip completed operations, exclude subcontractors, restrict aggregate limits, and add carrier-specific carve-outs that make them useless on real jobs. Spend the extra 15 minutes to get a real quote from a real agent. The premium difference is usually $20-$40 a month and the coverage difference is the entire business.
The Year-One Roadmap
Follow this order. Skipping steps usually means re-doing them, paying twice, or losing the first big bid.
Step 1: Pick Your Entity Before Buying Insurance
Sole prop, single-member LLC, or S-corp? The entity is the named insured on the policy. Buying the policy in your personal name and later switching to an LLC means re-issuing the entire policy — sometimes mid-term, with prorated premium and new application questions. Form the LLC first, then call us. Most states issue articles inside one business day online.
Step 2: Match Your Limits to the State License
Ohio requires $500,000 GL for state-licensed trades (HVAC, electrical, plumbing, hydronics, refrigeration). Most other states require $300,000 to $1,000,000 for general contractors and specialty trades. Your first call to us starts with the question: “What does my state license board require?” We will pull the current minimum and match it to the right policy.
Step 3: Match Your Limits to Your First GC
The state minimum is rarely enough for real work. Every commercial GC will require at least $1M per occurrence / $2M aggregate, name themselves as additional insured, and ask for primary & non-contributory wording and a waiver of subrogation. Buying the $300,000 state-minimum policy means re-quoting before your first commercial bid. Better to start at $1M/$2M and have the certificates ready.
Step 4: Decide on Workers’ Comp Before Hiring
If you are a solo operator with no employees, most states (including Ohio) let you opt out of workers’ comp on yourself. The moment you hire even a part-time W-2 helper, coverage is required by law. Pay close attention to 1099s — if they cannot show their own workers’ comp, your carrier may audit them onto your policy at year-end.
Step 5: Add Commercial Auto Before Driving the Truck
Personal auto policies exclude business use. The day your truck is loaded with tools and headed to a paid job, your personal auto policy may deny a claim. Commercial auto is non-optional once you are operating commercially — expect $1,200-$3,500 per vehicle annually.
Step 6: Bind, Then Bid
Once you have a bound policy and a COI, the GC paperwork phase opens up. Most commercial bidding packages require you to upload your certificate inside a vendor portal (typically Procore, Compliance Depot, or one-off PDFs) before bid day. Knock this out the week you bind so you are not scrambling at submission time.
Step 7: Document Everything You Quote and Sign
Year-one contractors often skip written contracts and rely on handshakes. The first dispute usually wipes any documentation problem off the table because there is none. Use a simple proposal template, get signatures, and keep digital copies. When a claim happens (and statistically, year-one contractors are more likely to have one), documentation is the difference between covered and denied.
Year-One Cost Ranges By Trade
| Trade | Solo GL ($1M/$2M) | 3-Person Crew | Notes |
|---|---|---|---|
| Handyman / light remodel | $600–$1,200 | $1,800–$3,400 | Easiest trade to insure |
| Carpentry / finish | $900–$1,800 | $2,400–$4,200 | Watch height endorsements |
| HVAC | $1,200–$2,400 | $3,500–$6,500 | $500K min per state |
| Electrical | $1,200–$2,800 | $3,500–$7,500 | License board verifies coverage |
| Plumbing | $1,400–$2,900 | $3,800–$7,800 | Water-damage exposure heavy |
| Painting | $800–$1,600 | $2,200–$4,200 | Watch over-spray claims |
| Roofing (residential) | $1,800–$3,800 | $5,500–$12,000+ | Specialty market required |
| Landscaping / hardscape | $700–$1,500 | $2,200–$4,800 | Tree work doubles rate |
| Concrete / masonry | $1,100–$2,300 | $3,200–$6,800 | Subsidence carve-outs vary |
| General contractor | $1,400–$3,000 | $4,500–$10,000 | Receipts-based rating |
Ranges are typical first-year quotes nationwide for low-revenue, no-claim, no-prior-coverage applicants. Your exact rate depends on revenue, employees, vehicles, and class code.
Why Trade Safe Insurance
New contractors are the toughest audience for an insurance agency because everyone is selling them something. We sell them coverage that actually works on the first claim — nothing more.
20+
Years exclusively in contractor insurance
Independent
Agency that shops dozens of carriers
Same-Day
COIs and binders for active jobs
Hard-to-Place
Roofing, demo, EIFS, prior losses welcome
Frequently Asked Questions
Can I get insurance before I have an LLC?
Yes — sole proprietors are insurable. But forming an LLC first usually costs $100-$200 and avoids re-issuing the policy three months later. Form the entity, get the EIN, then call us.
How fast can a new contractor get a COI?
Most new-venture quotes come back in 24-48 hours. Once you bind, COIs are usually same-day — often within an hour. If you have a job starting Monday and call us Friday morning, you will have your certificate in hand before the weekend.
Do I need workers’ comp on day one?
If you are solo, usually no — though many GCs will require it on every sub regardless. The moment you hire a W-2 employee, coverage is mandatory under state law. In Ohio, workers’ comp is monopolistic and purchased through the Bureau of Workers’ Compensation directly.
Will a new contractor pay more than an established one?
Often slightly — 5-15% above veteran pricing on the same trade because carriers cannot rate against loss history. New-venture programs from Hiscox, Hartford, Berkley, and Travelers price aggressively for first-year businesses, so the gap closes quickly.
What is the biggest year-one mistake?
Buying the cheapest online policy without reading the exclusions. Year-one contractors often discover at claim time that completed operations was stripped, subcontracted work was excluded, or aggregate limits were too low. The premium savings was $300; the claim denial was $80,000.
Do I need a contract for every job?
For every job over a few hundred dollars, yes — a one-page signed proposal is fine. Without one, claim disputes turn into he-said/she-said and your carrier loses leverage. Most consumer-protection statutes also require written agreements above certain thresholds.
Can I add a partner or co-owner mid-term?
Yes — the policy is endorsed mid-term to add named insureds. Tell your agent the moment ownership changes; otherwise a claim may be denied because the wrong entity is on the policy.
What documents do I need to get a quote?
EIN, articles of organization (if LLC), driver’s license, anticipated revenue or payroll, list of services performed, vehicle info (for auto), and any prior insurance declarations if applicable. Most new-contractor quotes need nothing more than a 10-minute phone call.
Start Year One With the Right Policy — Not the Cheapest One
15-minute quote. Same-day COI. Specialty-carrier pricing for new contractors. No 80-question online form.