Contractor Insurance FAQ

It depends on your trade, payroll, revenue, and which coverages you carry. A solo handyman with general liability alone might pay around $50-$100 a month, while a roofing or framing company with a crew, trucks, and a full stack pays much more once workers' comp payroll is added. Our 2026 cost guide breaks it down by trade.

General liability averages roughly $100 a month for many Colorado trades, with lower-risk work closer to $50 and higher-risk trades like roofing and framing running well above that. Standard limits are $1,000,000 per occurrence and $2,000,000 aggregate. Your class code, revenue, and claims history drive the exact number more than location does.

Workers' comp is priced per $100 of payroll times your class-code rate times your experience modifier, so it scales with your team and your trade. Office and light trades sit on the low end; roofers, framers, and excavators are among the highest-rated class codes. See our workers' comp guide for how the math works.

Yes. Most contractor policies are available with monthly installments, and workers' comp can often be written pay-as-you-go so you pay on actual payroll instead of an upfront estimate. A down payment followed by monthly payments is typical; paying annually usually earns a small discount.

Bundle your policies into one program, make sure your class codes are accurate, raise deductibles where you can absorb the risk, run a documented safety program, keep your claims history clean, and use pay-as-you-go workers' comp. Re-shopping at renewal with a specialist who can access multiple carriers is often the biggest lever.

Colorado has no single statewide insurance mandate for general contractors, but two things effectively require it: workers' comp is legally mandatory for any employer with one or more employees, and most Colorado cities require proof of general liability — and often a license bond — to register and pull permits. GCs and clients also demand a certificate before you start.

No. Colorado does not issue a statewide general-contractor license. Licensing and registration are handled at the local level, so requirements differ between Denver, Colorado Springs, Aurora, Fort Collins, and other jurisdictions. Electricians and plumbers are the exception — they are licensed at the state level through Colorado's DORA. Read more in our licensing guide.

Often, yes. Many Colorado cities and counties require a contractor license or permit bond — commonly $10,000 to $25,000 — before they will register you or issue permits. A surety bond is not insurance; it guarantees your work to the city, and you repay the surety for any valid claim. Requirements vary by jurisdiction, so confirm with your local building department.

Most Colorado GCs require subs to carry general liability (typically $1M/$2M), workers' comp, and often commercial auto, plus an additional-insured endorsement naming the GC. Bigger projects add umbrella limits. You prove it with a certificate of insurance — get the wording right or your start date slips.

Yes. Unlike general contractors, electricians and plumbers are licensed at the state level through Colorado's DORA Division of Professions and Occupations. They still need insurance in practice — cities, GCs, and clients require proof of general liability and workers' comp — but their license itself comes from the state board rather than a city.

Yes. Under the Colorado Workers' Compensation Act, virtually every employer with one or more employees — full or part-time — must carry workers' comp. It is enforced by the CDLE Division of Workers' Compensation, and going uninsured can bring fines, stop-work orders, and personal liability for an injured worker's benefits.

Sole proprietors, working partners, and certain LLC members can usually exclude themselves, so a true one-person operation may not be legally required to carry it. But the moment you hire anyone — even part-time or seasonal — coverage is mandatory. Many solo contractors buy a minimum policy anyway because GCs demand a certificate.

A ghost or minimum-premium policy is a low-cost workers' comp policy for an owner with no employees who still needs to show a general contractor a certificate before working on their site. It satisfies the certificate requirement at minimum premium; if you later add employees, it converts to a full payroll-based policy.

Yes. Under Colorado's statutory-employer rules, a contractor can be held responsible for the workers' comp benefits of an uninsured subcontractor's injured employee. That is why GCs insist on collecting a valid workers' comp certificate from every sub before letting them on the job — it protects the GC's own policy from the exposure.

General liability is third-party protection — it pays when you injure someone or damage someone else's property. Builders risk is first-party property coverage on the structure you are building and its materials, against hail, fire, wind, and theft until the project is done. Most Colorado projects need both. Our comparison guide walks through it.

Usually not while they travel. Tools and equipment that move between jobs, ride in your truck, or sit at a jobsite are covered by tools & equipment insurance — an inland marine floater — not by general liability or a building policy. Given Colorado's jobsite and vehicle theft rates, it is one of the most practical coverages a working contractor can carry.

Generally no. Standard general liability excludes the cost to fix your own defective work, and it excludes claims arising purely from professional advice or design errors. Those exposures are addressed by contractors E&O / professional liability. Given Colorado's active construction-defect litigation climate, design-build contractors should take that gap seriously.

An additional-insured endorsement extends your general liability to also protect the general contractor or property owner for claims arising from your work. Colorado GCs require it — often with primary-and-noncontributory and waiver-of-subrogation wording — so that if your crew causes a loss, your policy responds first. It is standard on almost every commercial certificate.

Yes. A personal auto policy typically excludes business use, so a claim while hauling tools or driving between jobs can be denied outright — leaving you exposed. Colorado's financial-responsibility minimums are 25/50/15, but most contractors carry far higher limits because GCs and leases require them. See commercial auto for details.

Colorado's Front Range sits in Hail Alley — among the most hail-prone regions in the country — and mountain projects face heavy snow load, high winds, wildfire, and freeze damage. Those perils regularly damage structures mid-build and equipment on site, which is exactly what builders risk and tools & equipment coverage exist to handle.

Insurance protects you; a surety bond protects the party requiring it — a city, an owner, or a project. A bond is a three-party guarantee, and if the surety pays a claim, you repay the surety. So a license bond satisfies a permit requirement, but it is not a substitute for general liability or workers' comp that actually covers your losses.

Public and municipal projects in Colorado routinely require performance and payment bonds under public-works bonding law, and some private owners require them too. A performance bond guarantees you finish the job; a payment bond guarantees your subs and suppliers get paid. Private permit work more often calls for a smaller license or permit bond.

It depends on your contracts. Many commercial, municipal, and multifamily projects require $2,000,000 to $5,000,000 in total limits, and a $1M general liability policy alone will not satisfy them. An umbrella / excess policy stacks limits on top of your GL, auto, and employers liability — usually the cheapest way to reach the numbers owners demand.

An annual policy covers all your work for the year and is simplest for contractors who take multiple jobs — most trades carry annual general liability. Per-project coverage (and per-project builders risk or excess limits) makes sense for large one-off jobs with unusual requirements. We help you decide based on your job mix and what each contract demands.