Commercial Construction Insurance: Cost, Companies, Types & Quotes From $11

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Construction companies in the USA need insurance to operate safely and legally. Carriers provide the best protection through commercial construction insurance. In this construction insurance for dummies guide, you’ll learn how the policy works, the cost of premiums, and where to get it.

Also read:

What is Commercial Construction Insurance?

Commercial construction insurance is an insurance product carriers underwrite to protect construction companies against management risks, project site risks, employment risks, and third-party liability risks.


Why is Construction Insurance Important?

Construction insurance will help your construction company cover the cost of third-party and employee injuries without incurring losses. You can also use this to fund expenditures for lawsuits if your business is sued. 

Having construction insurance also allows you to recoup losses if the construction materials and equipment become damaged or lost. 

Your construction company might rent or lease equipment. And with no construction insurance coverage in place, no equipment rental or leasing business will work with you. 

Last but not least, getting a construction insurance policy is a requirement to bid for and realize construction projects. 

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Types of Construction Insurance

There are two types of construction insurance-casualty and risk. Both can be further classified as:

  • General liability insurance

  • Professional liability

  • Employer’s liability insurance

  • Builders risk insurance

  • Commercial property insurance

  • Workers compensation insurance

  • Equipment insurance

  • Inland marine insurance

Construction General Liability Insurance 

General liability insurance or commercial general liability insurance (CGL) provides protection if your construction business is responsible for the injuries or property damage of third parties. Construction general liability insurance is extremely useful if:

  • An employee hits someone while using an equipment at the construction site

  • Explosions or flames originate from the construction site and injures people or damages properties nearby

  • An inspector falls from a height, slips, or experiences any other accident and holds your construction company accountable

Now, let’s take a look at how general liability insurance functions:

  • If it’s liable for bodily injuries, your construction company can use general liability insurance to cover settlements and medical expenses of the claimant

  • General liability insurance for construction company will provide refunds if a third party files a property damage claim

  • General liability insurance covers administrative fees, attorney fees, court fees, investigation fees, and other legal expenses if a third party sues your construction company for property damage or bodily injuries 

Carriers underwrite CGL construction insurance comprehensively. This means that it also provides a shield against other exposures. The following are additional coverages to general liability insurance:

  • Advertising injury coverage-General liability insurance with advertising injury coverage takes care of settlements or defense costs if your construction company committed or allegedly committed slander, libel, copyright infringement, and invasion of privacy

  • Contractual liability coverage-With contractual liability coverage included in its terms, general liability insurance covers indemnification for the liabilities your construction company assumes in a project contract

  • Non-owned/hired auto insurance-Indemnifies third parties and covers defense costs if a borrowed or hired dump truck, bulldozer, and other similar vehicles caused a vehicular accident

Now that you know how this construction casualty insurance works, let’s talk about the amount of coverage it provides. 

General liability insurance for small construction businesses has a $1 million-$2 million per occurrence limit. Big construction companies, on the other hand, can get a general liability insurance with more than $5 million per occurrence limit. 

Professional Liability Insurance for Construction Businesses 

Consider getting professional liability insurance for your construction company. This construction contractor insurance will cover costs if a claim is filed because your business caused economic or financial losses by:

  • Your construction company didn’t finish the project on time

  • Hired and assigned untrained workforce for a job

  • Failing to maintain construction equipment

  • Kept records poorly or lost them

  • Breach terms of the project contract

  • Divulged the confidential information of a client

So what particular costs are covered? This type of general construction insurance will indemnify the losses of the claimant. It will pay attorney fees, administrative costs, investigation fees, and other related costs if a lawsuit is filed against your construction company. 

Professional liability insurance for construction businesses has a $1 million-$2 million minimum per occurrence limit. In case you need more coverage, carriers allow you to get a per occurrence limit of $5 million. 

Most insurance companies offer occurrence-professional liability insurance to construction companies. When bought as an occurrence policy, this kind of construction industry insurance provides coverage regardless of when you decide to claim it. You can even use it even if its terms have expired, so long as the covered peril has happened while it’s active. 

Construction Excess Liability Insurance 

Purchase excess liability insurance if you’re experiencing any of the following issues with your construction company’s professional liability or general liability insurance:

  • The limits stated in the terms of your general liability or professional liability insurance are lackluster

  • Your professional liability or general liability insurance has exhausted its limit after covering a claim

This construction business insurance provides extra limits so that your construction company’s general liability or commercial property insurance can still cover a claim even though they’ve been exhausted or can’t provide adequate coverage. 

Remember that excess liability insurance acts as a backup. You can’t use this small construction business insurance to cover a claim. In fact, it’s impossible to have excess liability insurance if you don’t have general liability or professional liability insurance in the first place.

Construction Surety Bonds

In most states, construction companies need to purchase construction surety bonds in order to get a building permit. Furthermore, some clients will also look for it before agreeing to the terms of the contract. 

Regardless of where you choose to get it, a surety bond functions the same. It guarantees that, in case your construction company can’t finish the project because of an issue, the client receives indemnification for his or her losses. 

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Workers’ Compensation Insurance for Construction Companies

Accidents always happen in construction work. Construction injuries cost the United States $50 billion per year, and it’s estimated that 16 construction workers experience injuries per week. The most common causes are:

  • Getting hit by falling objects such as beams, tools, etc. 

  • Falling from a height

  • Electrocution due to poor electrical work or damaged insulation

  • Slip and fall

  • Carelessness

  • Being overrun by motorized construction equipment

  • Continuous repetitive movements

The law requires your construction company to provide compensation if an employee becomes injured. Workers’ compensation insurance can help. Common injuries covered by this type of corporate construction insurance are:

  • Cuts 

  • Burns

  • Concussions

  • Fractures

  • Eye injuries

  • Hearing loss

  • Amputations

The following are the costs covered by workers’ compensation insurance if an employee sustains any of the injuries above:

  • Medical treatment/ambulance-Your construction company can use workers’ compensation insurance to cover ambulance fees and emergency medical treatment if an employee becomes injured while working

  • Hospitalization-If an employee is admitted after getting injured, workers compensation insurance enables your construction company to provide compensation for hospital bills 

  • Medication-Workers compensation insurance can cover the cost of medicines that will help an employee recover from a work-related injury

  • Rehabilitation-An employee covered by workers compensation insurance will receive aid in paying therapist fees and other rehabilitation expenses 

  • Lost wages-Workers compensation insurance covers lost wages of an injured employee. The policy does this by providing a weekly allowance equal to two-thirds or 67% of  the average weekly pay your construction company provides 

  • Death benefits-Deaths are common in construction work. This is why workers’ compensation insurance doesn’t only cover injuries but also the death of your employee. It will pay for funeral expenses and provide a financial assistance to dependents 

What Happens If Your Construction Company Doesn’t Get Workers Compensation Insurance? 

Authorities will impose fines if your construction company operates without workers’ compensation insurance. This can either be a fine, a stop-hold order, or a criminal charge punishable by 1-2 years imprisonment. 

Employees not covered by workers ‘compensation insurance can sue your company for negligence. That said, your construction business is vulnerable to employee lawsuits without this insurance for construction workers. It might even have difficulties in retaining talents. 

Commercial Property Insurance for Construction Companies 

Commercial property insurance allows your construction company to recover losses if its building, equipment, and other belongings become damaged or lost due to:

  • Fire

  • Theft

  • Vandalism

  • Sinkhole collapse

  • Sprinkler leakage

  • Vehicle

  • Aircraft

  • Riot

  • Civil commotion

  • Volcanic action

  • Weather 

The limits of commercial property insurance vary depending on which carrier is underwriting it. Some insurance companies only allow the policy to give $25,000-$500,000 coverage. On the other hand, there are others that allow you to determine the limits yourself and make it possible for commercial property insurance to provide more than $1 million. 

Directors and Officers Liability Insurance

Consider getting directors and officers liability insurance if your construction company operates as a corporation led by directors and officers. 

You can use this insurance to cover indemnification and defense costs if the officers and directors are sued for reasons related to their functions. Examples are:

  • Breach of fiduciary duty

  • Breach of confidentiality

  • Embezzlement

  • Negligence

This construction management insurance has a $1 million-$2 million limit. However, for adequate coverage, consider getting $5 million-$10 million from this policy. 

Builders Risk Insurance for Construction Companies

A builders risk policy can be added to your commercial construction insurance. Also called building under construction insurance, this will recoup your losses if the construction project sustains damage due to:

  • Fire

  • Lightning

  • Hail

  • Explosions

  • Weather

  • Employee error

Aside from the construction project itself, this type of building construction insurance also protects equipment, construction materials, and supplies. 

Remember that this construction project insurance only provides protection during the course of the construction project. The policy ceases to work once the job is completed. 

Construction risk insurance isn’t all-encompassing. There are perils that it can’t shield you against. Exclusions are:

  • Wear and tear

  • Faulty workmanship

  • Aircraft

  • Vehicle

  • Government demolition orders

  • Employee theft

Theft Insurance for Construction Sites

As said earlier, builders’ risk insurance doesn’t provide help if an employee steals equipment and supplies at the construction site. To cover your company against losses when a worker commits such a crime, consider purchasing theft insurance. 

So how can this type of construction site insurance help you? Theft insurance will recover losses if equipment and supplies got damaged or lost because an employee stole them. The limits of theft insurance for construction companies is $25,000-$100,000. 

Construction Employers Liability Insurance

Employers liability insurance construction will cover defense costs and settlements if an employee who sustained a work-related injury sues your business for negligence. This has a $1 million per occurrence limit. Some insurance companies offer employer’s liability insurance as an add-on to workers’ compensation insurance. 

Construction Equipment Insurance

Your construction company is highly dependent on different equipment to complete tasks. You invested a lot in them. This is why insurance companies underwrite construction equipment insurance. 

Construction equipment insurance helps you buy a new unit or provides an immediate replacement if tools and machines of your construction company sustain damaged or become lost due to:

  • Theft

  • Operator error

  • Mechanical breakdown

  • Electrical surge

  • Electrical short

Equipment usually covered by construction equipment insurance are safety devices, drills, hammers, saws, compressors, electric generators, pavers, rollers, and more. Motorized equipment (e.g. dump trucks and wheeled bulldozers) that can traverse public roads are excluded from the terms of the policy. 

Non Standard Construction Insurance

Suppose your contracting company is involved in using specialty building materials or non-standard construction. In that case, you may want to purchase this insurance for the duration of the job you’re working on. Non standard construction is defined as the use of building materials that aren’t common, such as:

  • Natural wood structures (think treehouses)

  • Terracotta roofing

  • Adobe/clay

  • Composite polymers

  • Steel frame

Non standard construction insurance provides protection in the event that a non standard building project sustains damage or causes third party bodily injuries or property damage 

Home Construction Insurance

Home construction insurance is a specialty coverage that contractors and homeowners can use to cover houses being built. This is composed of third-party liability insurance construction, builders risk insurance, equipment insurance, and more. 

A homeowner can add residential construction insurance coverage to their homeowner’s insurance at an additional price. This covers liabilities if third parties get hurt during the house’s construction. 

Owner Builder Construction Insurance

Owner builder construction insurance is coverage for those who have their own construction project and want to get things done by themselves. This covers liability for the injuries or property damage of third parties. Coverage for construction site damage due to fire, theft, weather, and water is also included. 

Building Renovation Insurance

Building renovation insurance is a specialized coverage for building renovation projects. Inclusions to this insurance program are builders risk insurance, professional liability insurance, general liability insurance, and equipment insurance. 

Note that the limits of the policies included in building renovation insurance are lower because renovation projects aren’t as costly as new construction projects. But still, carriers allow you to customize to enjoy increased limits.

How Much Does Construction Insurance Cost?

Construction insurance cost will vary significantly from one customer to the next. Many factors affect the average cost of construction insurance such as:

  • The size of the project you’re working on

  • The value of the equipment being insured

  • The value of your tools and building materials

  • What type of coverage and policies you need

There are many ways for you to lessen construction company insurance cost such as:

  • Getting high deductibles

  • Ensuring that your employees are well-trained

  • Going for an annual one-time payment 

  • Bundling one or more policies

Below, we’ll show you the average price for a general liability policy and workers’ comp. These are the two most common types of construction business insurance that all companies need, so we figured we would provide you with a handy chart of the average construction company insurance cost so you know what to expect. 

Construction Liability Insurance Cost

The average construction liability insurance cost is around $73 per month or  $876 per year for a $1 million general liability coverage. Below, you’ll find a table outlining some of the most popular insurers and the average monthly and annual premiums for general liability insurance policies:

Insurance Provider Average Monthly Rate Average Annual Rate Best for
Hiscox $39.40 $472.80 Construction companies who have domestic and international projects
CoverWallet $64.12 $769.44 Construction insurance quotes comparison online
Thimble $94.64 $1,135.68 BOP for construction companies
Tivly $110 $1,320 Comparing construction insurance quotes over the phone
Next $126.50 $1,518 Best overall; Fastest general liability insurance for commercial construction companies
Geico $158 $1,896 Small to mid-sized commercial construction contractors
AXA $175 $2,100 Building under construction insurance and large commercial projects
State Farm $179 $2,148 Small to mid-sized commercial construction contractors

Always compare construction insurance quotes to find the best liability coverage at the most budget-friendly rate. Start by clicking the “Get Quotes” button on this page. 

Construction Workers Comp Insurance Cost

The average construction workers comp insurance cost is around $271 per month or  $3,250 per year due to the high risk involved in construction work. Factors that determine rates are location, payroll, claims history, and business history.

Insurance Provider Average Monthly Rate Average Annual Rate
NEXT $69 $828
CoverWallet $90 $1,080
Tivly $115 $1,380
Thimble $125 $1,500
Hiscox $150 $1,800
Geico $267 $3,204
State Farm $272 $3,264
AXA $291 $3,492

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Best Construction Insurance Companies

If you’re searching for “construction insurance near me,” then look no further. In this section, we’ll take a look at the best construction insurance companies. Read to know their pros, cons, and rate for a $1 million general liability insurance. 

CoverWallet Construction Insurance


  • Compare quotes online

  • Online policy management

  • Easy policy cancellation

  • General liability insurance has waiver of subrogation 


  • You need to call a representative to get a quote for workers compensation insurance

CoverWallet’s commercial construction insurance offers general liability, commercial property, builder’s risk, and commercial auto insurance. 

Your general liability insurance from this company will have a $2 million per occurrence limit with a $2 million aggregate. Terrorism coverage and waiver of subrogation are already included.

As for commercial property insurance, CoverWallet allows the policy to provide $10,000 contents coverage and $25,000 building coverage. 

CoverWallet’s commercial auto insurance for your construction company can cover dump trucks, bulldozers, and other motorized construction equipment that traverse roads. 

Last but not least, your builders risk insurance from CoverWallet provides up to more than $100,000 coverage. You can insure multiple construction projects with it. 

Best for: Construction insurance quotes comparison online

Average cost: $64.12 per month

Our rating: 10/10

Tivly Construction Insurance


  • Responsive customer service

  • 24/7 claims filing

  • Will refer you to partners if your business doesn’t match its underwriting appetite

  • A partner of trusted small business insurance companies such as NEXT and Thimble 


  • You need to call to get a quote

Tivly (formerly CommercialInsurance.NET) sells general liability, commercial property, workers compensation, commercial auto, and other business insurance policies for construction companies. 

This company doesn’t immediately provide a construction insurance quote online. After providing your details through its website, a representative will then call to talk about the specifics of the policies you want to get. 

You can also call Tivly now to compare quotes over the phone. 

Best for: Comparing construction insurance quotes over the phone 

Average cost: $110 per month

Our rating: 10/10

NEXT Commercial Construction Insurance


  • Cheap general liability insurance

  • Excellent customer reputation

  • Issues a certificate of insurance that you can send to anyone easily

  • Great value for money

  • Best overall

  • Fastest GL policy online

  • 10% discount if you purchase two or more policies


  • Doesn’t sell excess liability insurance for construction companies 

NEXT commercial construction insurance offers general liability, workers’ compensation, and commercial property insurance. Though it’s a fairly new construction insurance company, NEXT covers small and big general, residential, industrial, and commercial construction firms.

This company’s general liability insurance for construction companies has a $1 million per occurrence limit with a $2 million aggregate. Tools and equipment coverage as well as professional liability insurance is included in its terms. 

As for commercial property insurance, NEXT provides up to more than $1 million coverage for your construction company’s building and contents. The commercial property insurance of this company also protects you against employee theft and business interruption. 

We encourage you to get two or more policies from NEXT to enjoy cheap construction insurance. If you buy many policies, the company provides a 10% discount. 

Best for: Best overall; Fastest general liability insurance for commercial construction companies

Average cost: $126.50 per month

Our rating: 10/10

Thimble Construction Insurance


  • Instant coverage

  • Comprehensive commercial property insurance

  • Equipment breakdown coverage can be added to commercial property insurance

  • You can choose to get a short-term general liability insurance


  • Doesn’t sell commercial auto insurance for construction businesses

Thimble’s construction insurance is available as a business owner’s policy that offers general liability and commercial property insurance. 

Your construction company’s general liability insurance from Thimble will have a $1 million per occurrence limit with a $250-$1,000 deductible. 

Thimble’s commercial property insurance, on the other hand, has a $25,000-$500,000 contents coverage and a $25,000-$1 million building coverage. Your deductible is $500-$2,500. 

Best for: BOP for construction companies

Average cost: $94.64 per month

Our rating: 10/10

Hiscox Construction Insurance


  • Worldwide coverage

  • Fast to process claims 

  • In-house team of underwriters


  • Poor customer reviews on BBB

Hiscox’s general liability insurance for construction companies has a $2 million per occurrence with a $2 million aggregate limit. It doesn’t have additional coverage. However, your general liability insurance from this company provides worldwide protection. 

Professional liability insurance from Hiscox has a $1 million per occurrence with a $2 million aggregate. 

As for construction commercial property insurance, it offers $25,000 contents coverage and $50,000 building coverage. 

Best for: Construction companies who have domestic and international projects

Average cost: $39.40 per month

Our rating: 9/10

AXA Construction Insurance


  • Provide coverage for projects around the globe

  • Specializes in providing insurance for large projects

  • Provides specialty environmental coverage


  • No physical offices in the United States

  • Not designed for small residential construction projects

AXA is an insurance firm that provides a wide range of construction industry insurance policies for builders and contractors around the world. AXA focuses on construction project insurance, which is categorized on their site under the sub-category of AXA XL construction insurance.

Here you’ll also be able to find a comprehensive list of coverages, including casualty insurance, environmental insurance, construction contractor insurance, and several other umbrella policies designed to cover all of your needs at the same time. So if you’re looking for a one-stop-shop for major projects, AXA is a great company to go with. 

Best for: Building under construction insurance and large commercial projects

Average cost: $175 per month 

Our rating: 9/10

State Farm Construction Insurance


  • Amazing customer service and claims handling

  • Wide variety of comprehensive construction insurance plans are available

  • Competitive pricing and deals available for loyal customers

  • Brick-and-mortar offices located nationwide for easy access


  • You may have trouble when making out-of-state claims

While Geico may be the nation’s biggest insurer, State Farm is one of the country’s oldest insurance companies. Through their history of being in business, the insurance provider has built a stellar reputation based on providing outstanding customer service, competitive pricing, and offering a wide variety of coverage options for business owners and contractors. 

Whether you’re looking for comprehensive worker’s compensation plans, new building site coverage, builder-owner insurance, or general builder’s risk insurance, State Farm can cover all of your needs. If you’re looking for an insurance company that makes getting insurance a breeze and provides reliable service and respectful communication, State Farm is one of the best in the industry. 

Best for: Small to large-sized local commercial construction companies

Average cost: $179 per month

Our rating: 9/10

Geico Construction Insurance


  • Large insurer with agents and locations nationwide

  • Fair prices

  • Provides coverage for small companies/projects and larger projects alike. 

  • Handle claims through the Geico app


  • Some policy coverage will go through a third-party insurance partner

Geico is one of the biggest insurers in the United States, and they offer everything from simple home and auto coverage to insurance policies for large commercial construction projects. Geico is well known in the construction industry for their fair prices and their ease of access. 

Claims can be easily made through their insurance app, and agents typically get back to policyholders quickly and handle claims efficiently. So whether you’re looking for small construction business insurance or coverage for a larger project, Geico can help you create a customized plan that’s perfect for your needs. 

Best for: Small to mid-sized commercial construction contractors

Average cost: $158 per month

Our rating: 8/10

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