How Much Does Contractor Insurance Cost? A Breakdown by Trade, Policy, and State

By Pascal Burke, Licensed Insurance Broker  |  Updated April 13, 2026

TL;DR: Contractor insurance can cost anywhere from a few hundred dollars a year for a low-risk owner-only setup to many thousands per year for a contractor with payroll, trucks, higher-risk operations, and strict contract requirements. For many small contractors, general liability insurance is often the starting point, workers’ compensation insurance usually becomes one of the biggest line items once employees are involved, commercial auto insurance can climb quickly depending on vehicles and driver history, and a ghost policy is a much narrower, owner-only compliance tool, not a substitute for real workers’ comp. Current benchmark data shows general liability commonly landing around $55 to $79 per month across many small businesses, while contractor trade averages run higher in many classes. Roofing usually costs the most out of the three trades covered here, plumbing sits in the middle, and general contracting varies sharply based on whether you are sub-heavy, self-performing, or taking on higher-risk scopes. California usually prices harder than Texas, especially once workers’ comp enters the picture.

Why this is the first insurance question most contractors ask

In brief: Most contractors are not really asking for a generic average. They are trying to figure out what they should budget before bidding jobs, hiring help, adding trucks, or sending over a certificate.

When a contractor searches “how much does contractor insurance cost,” what they usually mean is one of five things:

• How much will it cost me to get started?
• How much will it cost for my trade?
• How much will it cost in my state?
• How much will it cost once I hire employees?
• How much will it cost to meet a GC or project owner’s insurance requirements?

Those are not the same question.

A solo owner-operator with no employees, no trucks, and a low-risk scope can have a radically different budget from a roofing contractor with payroll, pickups, subcontractors, and project paperwork that calls for Additional Insured, Primary and Noncontributory, or Waiver of Subrogation wording. The more accurate way to answer the pricing question is to break it down by policy, trade, and state instead of pretending there is one number that fits everybody.

The short answer: what contractor insurance usually costs

In brief: There is no single “contractor insurance price,” but there are reliable benchmark bands that help you budget before you request a custom quote.

Here is the clearest high-level view:

As current benchmarks, Progressive says the median monthly cost of general liability for new customers was $55 in 2025, with an average of $79 per month. Progressive also says contractor autos averaged $272 per month in 2024. For workers’ comp, Progressive says its median monthly premium was $76 in 2025, while Insureon’s construction and contracting customers averaged $254 per month for workers’ comp. For owner-only ghost-policy setups, Insureon says ghost policies typically run about $750 to $1,200 annually. 

That means the practical budgeting answer for many contractors looks like this:

A very small, low-risk owner-only contractor may spend mainly on general liability insurance, possibly a ghost policy where appropriate, and maybe a small tools and equipment policy. A contractor with employees often sees workers’ comp become a major cost driver. A contractor with pickups, vans, or fleet exposure almost always feels the impact of commercial auto quickly. Higher-risk or higher-requirement accounts may also need umbrella / excess liability, contractor bonds, builder’s risk, or professional liability / E&O depending on the work.

Cost by trade: roofing vs. general contractors vs. plumbing

In brief: Roofing is usually the most expensive of these three trades to insure, plumbing usually sits in the middle, and general contractors swing the most based on scope, subcontracting, and payroll.

Here are current trade benchmarks from Insureon for the three trades most relevant to ContractorsInsured’s focus:

These benchmark numbers come from policies purchased by Insureon customers in those specific trades. They are not universal quote promises, but they are useful directional benchmarks for budgeting.

Roofing contractors

Roofers usually feel pricing pressure first on liability and eligibility. That is not surprising. The work is higher hazard, claims can be severe, and carriers often look closely at height exposure, hot-work exposure, crew size, subcontracting, and the exact share of residential versus commercial work. Insureon’s current benchmark for roofing contractors is $267 per month for general liability, $254 per month for workers’ comp, and $173 per month for commercial auto.

In the real world, roofing costs can swing widely above or below that depending on whether you are an owner-operator, a repair-only crew, a reroof specialist, or a larger contractor with multiple crews. California roofing contractors should pay especially close attention to workers’ comp compliance because California already has stricter contractor rules in this area. ContractorsInsured’s trade and state pages for roofing contractors, California roofing GL, and Texas roofing GL are the right next reads if roofing is your primary trade.

General contractors

General contractors are the hardest trade to quote off a one-line description because the phrase “general contractor” hides a lot of underwriting detail. A paper GC that subcontracts nearly everything can price very differently from a GC that self-performs framing, finish work, demolition, or tenant improvements. Insureon’s current averages for general contractors are $142 per month for general liability, $318 per month for workers’ comp, $180 per month for commercial auto, and $134 per month for builder’s risk when purchased.

This is one reason general contractors insurance needs a quote built around real operations, not assumptions. If you use subcontractors, your cost can also be affected by whether subs carry their own coverage, whether you collect certificates correctly, and how your insurer views uninsured or poorly documented subs at audit time. That is why subcontractor insurance compliance and premium audit controls matter so much to final cost, not just to paperwork.

Plumbing contractors

Plumbers usually land below roofing on liability but can still carry meaningful workers’ comp and auto spend because service fleets, tools, water-damage exposure, and dispatch driving all matter. Insureon’s current averages for plumbing are $115 per month for general liability, $195 per month for workers’ comp, and $225 per month for commercial auto.

That auto number is important. Many plumbing businesses think first about liability, but a few vans, a few drivers, and a few bad motor vehicle records can turn commercial auto into one of the largest line items on the account. Plumbing contractors who want a tighter budget should also review whether they need all optional coverages immediately or whether some can be phased in as revenue grows, while still keeping the must-have policies in place.

Cost by policy type

In brief: The smartest way to budget contractor insurance is to separate the policies that are usually mandatory or frequently requested from the policies that are project-driven, contract-driven, or growth-driven.

1) General liability insurance

General liability insurance is the coverage most contractors buy first because it is the policy most often requested in bids, vendor packets, leases, and owner or GC onboarding. It helps with third-party bodily injury, property damage, and related legal defense. Current benchmark data from Progressive shows a median of $55 per month and an average of $79 per month for general liability across new customers, while Insureon says construction and contracting businesses average $82 per month overall. Trade-specific averages climb above that for many contractors, including $142 per month for general contractors, $115 for plumbers, and $267 for roofers.

The biggest GL pricing drivers are trade, business size, state, number of employees, time in business, coverage limits, claims history, and whether the carrier sees a lot of foot traffic, subcontractor exposure, or contractual add-ons. Progressive explicitly lists profession, location, number of employees, time in business, coverage selected, and claims history as major pricing factors.

2) Workers’ compensation insurance

Workers’ compensation insurance is where many contractor budgets stop being “small business insurance” and start becoming “construction insurance.” Workers’ comp is driven heavily by payroll, class code, state rules, and claim history. Insureon states the basic premium formula as classification rate × experience modification rate × annual payroll ÷ 100. That is why adding employees or moving into higher-risk scopes changes your price so fast.

Trade averages also show how quickly workers’ comp becomes a major line item in construction. Insureon reports $254 per month for roofers, $318 per month for general contractors, and $195 per month for plumbers in its recent trade pages. Across all construction and contracting businesses on its platform, workers’ comp also averages $254 per month.

For California contractors, workers’ comp becomes especially important because California requires employers, including contractors, to carry workers’ comp even with only one employee. For Texas contractors, the legal framework is different, but a low state-average number does not mean construction work is cheap. Texas may have a low overall small-business workers’ comp average, but contractor class codes can still price materially higher, especially in roofing and other hazard-heavy trades.

3) Commercial auto insurance

Commercial auto insurance is often underestimated by contractors until they add a second truck or a second driver. Progressive says contractor autos averaged $272 per month in 2024. Insureon reports trade-specific averages of $173 for roofing, $180 for general contractors, and $225 for plumbing. Insureon also says small businesses overall average $245 per month for commercial auto.

Why the spread? Because commercial auto is shaped by variables that can change fast: the number of vehicles, vehicle type, radius, garaging ZIP, personal driving records, claims history, and whether you are insuring light-duty pickups, cargo vans, or heavier units. A one-truck owner-operator with a clean record is not the same risk as a three-van service contractor with mixed driver history. This is also one reason many contractors eventually add umbrella / excess liability when they start scaling fleet exposure.

4) Ghost policy

A ghost policy sits in a very different category from the other policies above. It is generally relevant to owner-only businesses that need proof of workers’ comp-related insurance for a contract or compliance reason but do not have employees to insure. Insureon says ghost policies typically cost about $750 to $1,200 per year, and it also notes that ghost policies provide zero workers’ comp coverage and that availability depends on state rules.

That means a ghost policy is usually a documentation and eligibility tool, not a substitute for real workers’ comp. For owner-only contractors, it can be a useful and cost-efficient option where allowed. For contractors with employees, payroll, or real worker exposure, it is usually the wrong answer.

California vs. Texas: what changes in these two focus states

In brief: California is usually tougher on workers’ comp obligations and often tougher on pricing. Texas is more flexible on the legal requirements for private employers, but contract requirements and trade class codes still matter a lot.

California contractor insurance costs

California contractors should assume stricter workers’ comp obligations from the outset. The California Contractors State License Board says employers, including contractors in construction, must carry workers’ compensation insurance even if they have only one employee. The California Department of Industrial Relations says the same thing: if a business employs one or more employees, it must satisfy the workers’ comp requirement.

On the pricing side, California is not a light market. MoneyGeek’s current California benchmark puts standard general liability at an average of $190 per month for a $1 million / $2 million policy. On the workers’ comp side, California adopted an average advisory pure premium rate of $1.52 per $100 of payroll effective September 1, 2025, though insurers are not bound to charge that exact amount because it is advisory.

In plain English, California contractors usually need to budget with less optimism than Texas contractors, especially once they have payroll. The relevant internal service-area page is California contractor insurance, with deeper state-specific paths for California roofing workers’ comp, California roofing GL, and California general contractor GL.

Texas contractor insurance costs

Texas gives contractors more flexibility on workers’ comp at the private-employer level, but that does not mean workers’ comp is irrelevant. The Texas Department of Insurance says most private employers in Texas are not required to carry workers’ compensation. However, private employers who contract with government entities must provide workers’ comp coverage for employees working on the project, and some contractors also require their subcontractors and independent contractors to carry it.

For general liability, MoneyGeek’s current Texas benchmark is $122 per month on average, noticeably below California’s $190 monthly benchmark. For workers’ comp, Insureon lists Texas among the lowest state-average jurisdictions at $32 per month across all small businesses, but that is not a construction-only number and should not be treated as a contractor quote. Texas TDI’s official rate guide shows how class codes can materially change the picture. Its current example for code 5551 roofing uses a July 1, 2026 loss cost of 1.946, which becomes 2.919 per $100 payroll at a carrier loss cost multiplier of 1.50.

The practical takeaway is simple: Texas can be cheaper than California, but it is not automatically cheap. A contractor with risky work, payroll, trucks, or public-project obligations can still end up with a meaningful insurance budget. The right internal starting point is Texas contractor insurance, along with Texas roofing workers’ comp, Texas roofing GL, and Texas general contractor GL.

What actually makes your price go up or down

In brief: Premium is rarely determined by one thing. It is usually a stack of underwriting factors that all push in the same direction.

Here are the main factors that move contractor insurance cost:

Your trade and class codes. Roofing, self-performed GC work, and other higher-hazard operations usually cost more than lower-risk classes. Reviewing your contractor class codes matters because bad classifications can distort your premium before the policy even starts.

Your payroll. Workers’ comp is fundamentally payroll-driven, so hiring people changes your insurance budget immediately. 

Your revenue and size. General liability usually rises with business size, annual revenue, and number of employees.

Your claims history and EMR. Clean loss history helps. A rough loss run or high experience mod can make workers’ comp especially expensive.

Your vehicles and drivers. Auto pricing reacts quickly to driver MVRs, vehicle type, territory, and usage.

Your state. California and Texas do not operate under the same workers’ comp reality, and even general liability averages differ materially between the two.

Your contract requirements. Endorsements and compliance details do not always show up as giant premium jumps, but they can affect eligibility, carrier choice, and admin burden. Pages like certificate of insurance, additional insured, primary and noncontributory, and waiver of subrogation matter because the cheapest quote is not helpful if it cannot satisfy the contract.

The biggest pricing mistakes contractors make

In brief: Most overpayment problems are not caused by the market alone. They are caused by bad inputs, wrong assumptions, or buying the wrong policy for the real exposure.

The first mistake is shopping by label instead of by exposure. A contractor asks for “cheap insurance,” gets a low-cost quote, then discovers later that the quote assumed no employees, no subcontractor exposure, or a much narrower scope of work than the business actually performs.

The second mistake is underestimating audit risk. A policy that looks cheap on day one can become much more expensive after payroll, sales, or subcontractor costs are audited. That is why insurance premium audit for contractors is not just a compliance topic. It is a cost-control topic.

The third mistake is ignoring the cost of contract compliance. A quote may look good until a GC asks for AI, WOS, PNC, jobsite-specific COIs, or proof of subcontractor insurance controls. At that point, cheap can become unusable.

The fourth mistake is assuming a ghost policy is a general workers’ comp replacement. It is not. It is a narrow tool for the right owner-only setup where state rules and contract requirements allow it.

What contractors should budget for in the real world

In brief: Think in layers, not in one premium.

For many small contractors, the initial budget stack looks like this:

First layer: general liability
Second layer: commercial auto if vehicles are involved
Third layer: workers’ comp once employees enter the picture
Optional or project-driven layers: builder’s risk, umbrella / excess, tools and equipment, professional liability / E&O, and contractor bonds

That layered view matters because many contractors do not need every policy on day one, but almost all growing contractors need to know which policy will hit next and why.