The New Contractor Insurance Checklist
Before you swing a hammer for a paying client, here is what general contractors are commonly asked to have in place.
Why this matters before day one
Most general contractors discover the paperwork side of the business the hard way — a builder, a property manager, or a homeowner asks for proof of insurance and a license bond before they will let work begin. Lining these items up early is generally intended to keep you from losing a job over a missing document.
The list below reflects what new contractors are commonly asked to carry. Exact requirements vary by state, by trade, and by the contract in front of you, so treat this as a starting point and confirm the specifics with a licensed insurance professional.
The new-contractor checklist
- General liability (GL) insurance. Commonly the first coverage a client asks about. A GL policy is generally intended to respond, in the event of a covered claim, to third-party bodily injury or property damage allegations arising from your work.
- Workers’ compensation. If you have employees, workers’ comp may be required by your state. It is generally intended to address job-related injuries to your workers, and many clients will not let an uninsured crew on site.
- A contractor license bond. Many states and municipalities require a license or permit bond before issuing a contractor license. A bond is a financial guarantee — not liability insurance — and is commonly a condition of getting licensed.
- Commercial auto. If you drive a truck or van for the business, a personal auto policy may exclude business use. Commercial auto is generally intended to address vehicle-related claims tied to your work.
- Tools and equipment coverage. Often added to a policy as inland marine, this is generally intended to respond to covered loss or damage to the tools and equipment you depend on.
- A certificate of insurance (COI). The one-page proof clients ask for. Once your policies are active, your insurer can issue a COI summarizing your coverage and limits.
- Additional insured endorsements. Contracts commonly require you to name the client or property owner as an additional insured. Confirm your policy can add them before you sign, because adding them is generally a request to your insurer rather than something you write yourself.
- A simple document folder. Keep your license, bond, COI, and endorsements in one place — digital and printed — so you can produce them the moment a client or inspector asks.
Frequently asked questions
Do I really need insurance before my very first job?
Many clients, builders, and permit offices ask for proof of insurance and a license bond before work begins, so it is common to line these up first. Whether any specific coverage is legally required depends on your state and trade — confirm with a licensed insurance professional.
Is a license bond the same as liability insurance?
No. A license bond is a financial guarantee that is commonly required to obtain a contractor license, while general liability insurance is generally intended to respond to covered third-party injury or property-damage claims. They serve different purposes and are often both requested.
What is an additional insured?
It is a party — often a client or property owner — added to your policy by endorsement at their request. Contracts commonly require it. Whether and how a party can be added depends on your policy terms.
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