General Liability Insurance for Contractors: The Complete Guide

The Painter’s Denied Claim

A residential painter in Sacramento finished a full exterior repaint on a $1.2M home — prep work, prime, two coats, the whole job done right. Client was happy. Final invoice paid. Everyone moved on.

Eighteen months later, the paint started peeling on the north-facing side. Water got behind the siding. By the time the homeowner noticed, there was $38,000 in water damage to the sheathing and insulation.

The homeowner sued the painter. The painter called his insurance company. And the claim was denied.

Why? His GL policy didn’t include completed operations coverage. It only covered incidents that happened while he was actively on the job. Once he packed up and left, coverage stopped. An $1,800/year policy with completed operations would’ve covered the $38,000 claim plus $15,000 in legal defense costs. Instead, the painter paid out of pocket.

This is the single most common — and most expensive — gap in contractor insurance. And it’s entirely preventable.

What General Liability Covers

General liability insurance for contractors covers three main categories of risk:

Third-party bodily injury. If someone who isn’t your employee gets hurt because of your work or your presence on a jobsite, GL pays their medical bills and covers your legal defense if they sue. A homeowner steps on a nail your crew left in the driveway. A passerby trips over your extension cord on the sidewalk. A client’s child gets hurt by equipment left unsecured. That’s all GL.

Third-party property damage. If your work damages someone else’s property, GL covers the repair or replacement. You’re running a trencher and hit a buried gas line. Your scaffolding falls and dents a client’s car. A plumbing connection fails during pressure testing and floods the basement. GL handles it.

Completed operations. This covers claims that arise after you’ve finished and left the jobsite. Faulty wiring causes a fire six months later. A deck railing you installed gives way. A roofing job starts leaking the following spring. Completed operations is what protects you from the work you did last month, last quarter, or last year.

GL also covers your legal defense costs — attorney fees, court costs, settlements — even if the claim turns out to be frivolous. Defense costs alone can run $10,000–$50,000, and they’re covered in addition to your policy limits with most carriers.

What GL Doesn’t Cover

Knowing what GL doesn’t cover is just as important as knowing what it does:

Employee injuries — that’s workers compensation. If one of your employees falls off a ladder, GL won’t pay. You need a separate WC policy.

Your vehicles — that’s commercial auto insurance. GL doesn’t cover accidents involving your work trucks or vans, whether they happen on the road or on a jobsite.

Your tools and equipment — that’s inland marine insurance. If your $15,000 in tools gets stolen from your truck or damaged on a job, GL doesn’t cover it.

Professional errors — that’s professional liability (errors & omissions). If you’re a design-build contractor and your design is flawed, GL may not cover the resulting damage. You’d need a professional liability endorsement or separate policy.

Intentional damage or fraud — no insurance covers deliberate acts. If you knowingly use substandard materials or cut corners, don’t expect GL to bail you out.

GL Cost by Trade

Your trade classification is the primary driver of your GL premium. Here’s what contractors typically pay for a $1M/$2M GL policy with completed operations included:

Trade	Annual GL Premium	Key Risk Factor
Painting (interior/exterior)	$700–$1,400	Low injury risk, moderate property damage risk
Landscaping	$600–$1,200	Low injury risk, low property damage risk
Electrical	$900–$1,800	Fire risk from faulty wiring (completed ops)
Plumbing	$1,000–$2,000	Water damage risk (completed ops)
HVAC	$900–$1,700	Moderate risk, refrigerant exposure
General Contracting	$1,200–$2,800	Multiple trades supervised, broad exposure
Concrete / Masonry	$1,500–$3,000	Structural failure risk (completed ops)
Roofing	$2,500–$5,500	Height exposure, weather damage claims

These ranges assume $250K–$500K in annual revenue, 1–5 employees, and a clean claims history. Your actual rate will vary based on your specific revenue, state, and loss history.

But here’s my opinion on GL pricing: most contractors focus too much on the premium and not enough on what’s actually included. A $900/year policy without completed operations is worse than a $1,400/year policy with it. Always check what’s included before comparing prices.

Per-Occurrence vs. Aggregate Limits

GL policies have two limit numbers, and contractors mix them up all the time. Let me clear it up.

Per-occurrence limit is the maximum the policy pays for any single claim. If you carry $1M per occurrence and a client sues you for $800,000 in property damage, you’re covered up to that $1M.

General aggregate limit is the maximum the policy pays for ALL claims combined during the policy period (usually one year). A $2M aggregate means the total of all claims in that year can’t exceed $2M.

The most common setup is $1M/$2M — $1 million per occurrence, $2 million aggregate. This satisfies 90%+ of GC and contract requirements. Some larger commercial projects require $2M/$4M, which typically costs 15–25% more.

Here’s the thing. If you’re doing high-volume residential work with dozens of jobs per year, your aggregate limit matters more than you think. One $500K claim in January reduces your remaining coverage to $1.5M for the rest of the year. Two claims, and you’re already at your limit.

Why Completed Operations Coverage Matters

I keep coming back to this because it’s that important. Completed operations coverage is included in most standard GL policies — but not all. Some budget carriers or online quote platforms sell “premises and operations only” policies that specifically exclude completed operations to keep the premium low.

And that’s dangerous. Because for most contractors, the biggest risks don’t happen while you’re on the job — they happen after you leave.

An electrician who wires a panel incorrectly might not see a problem for a year — until an arc fault starts a fire. A plumber whose fitting fails might not hear about it until there’s $50,000 in water damage. A roofer whose flashing wasn’t sealed right might not get a call until the spring rains come.

These are all completed operations claims. And they’re often the most expensive claims contractors face because the damage has time to compound before anyone notices.

Look. When we quote contractors in California, Texas, or Colorado, we always include completed operations. It’s not optional in my book. If your current policy doesn’t include it, you should switch immediately.

How to Buy the Right GL Policy

First, make sure completed operations is included. Ask specifically — don’t assume.

Second, match your limits to your contract requirements. If every GC you work for requires $1M/$2M, that’s your baseline. If you’re bidding larger commercial projects, you may need $2M/$4M or an umbrella policy.

Third, check for additional insured and waiver of subrogation endorsements. Most GCs require both. Some carriers include them automatically; others charge extra. Read the Contractor COI Checklist for exactly what to look for.

Fourth, get your certificates right. A COI that doesn’t match the contract requirements will get rejected. We turn around COIs same-day and make sure they’re formatted correctly for the GC who’s asking.

And fifth — shop it. GL premiums for the same contractor can vary 40–60% between carriers. We quote with 30+ A-rated carriers on every submission. Use our Contractor Insurance Calculator to get a starting estimate, or go straight to a full quote.

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Bobby Friel is the founder of Direct Insurance Services, specializing in commercial insurance for contractors, HOAs, restaurants, and commercial landlords across 29 states. He’s placed GL policies for thousands of contractors across every trade — and he’s seen too many denied claims from policies that looked cheap but left out the coverage that matters.