The insurance you actually need

A general contractor's office manager emails you Thursday afternoon. She needs a certificate before Monday: $1 million each occurrence, $2 million aggregate, her company named as additional insured, waiver of subrogation, primary and non-contributory. You forward it to your agent, and he tells you some of what she listed is not on your policy.

Most contractors learn what their policy actually covers this way — not after a claim, but before a job, when someone else's paperwork audits it for them. Those limits are that GC's requirement, not a national standard.

Five separate holes, and no single policy covers them all

Most solo trades start with the first and add the second the week they hire. The last matters if you sell design-build, load calculations — anything where the customer is buying your judgment rather than your hands.

General liability pays for the floor. It usually will not pay for the fitting.

You install a water heater. The supply connection weeps overnight and the customer wakes up to soaked hardwood and ruined drywall.

The floor and the drywall are third-party property damage, and a general liability policy is built for that. The water heater itself — your work, the thing you installed wrong — usually is not. Standard forms carry exclusions for damage to the particular property you were working on and, separately, for damage to your own completed work. Wording differs between carriers and endorsements can change the answer, so read your own exclusions with your agent.

So redoing the bad work comes out of your pocket. The damage it caused is what the policy is for.

Two other pieces of the same policy are worth knowing by name. Products-completed operations covers damage that surfaces after you have left the job. The aggregate is a yearly ceiling across all claims, not a per-job limit — usually with a second, separate aggregate for completed operations.

Workers' comp is a state rule, and it can reach your subs

There is no national threshold. States differ on when coverage becomes mandatory — whether the count starts at one employee or higher — and several apply a lower or zero threshold to construction specifically. Texas is the well-known outlier where coverage is generally optional for private employers, with exceptions. Your state's workers' compensation agency is the only place to get your own answer.

Two things surprise people everywhere.

You may be able to exclude yourself, and that is a real decision. Owners of an LLC or corporation can often file to exclude themselves and lower the premium, where the state allows it. Before you do, check whether your health plan excludes work-related injuries — some do, which can leave a solo owner uncovered for the injury most likely to happen to them.

An uninsured sub can land on your bill. Workers' comp and general liability premiums are audited after the policy year. If a subcontractor cannot produce a certificate for the period they worked for you, many carriers will treat what you paid them as your own payroll and charge premium on it. Get the certificate before the first day, and put its expiration date on your calendar.

The truck, and the tools riding in it, are two different problems

A personal auto policy is written for personal use. Carriers differ, but business use — your name on the door, hauling material for pay — is commonly excluded or limited, and you find out after a claim. If the truck is titled to the business, or an employee drives it, you are into commercial auto. If employees run errands in their own vehicles, ask about hired and non-owned auto, usually an endorsement rather than a separate policy.

Neither covers the tools. Auto insurance covers the vehicle, not its contents, and a homeowner's policy typically caps or excludes business property. That leaves inland marine — a contractor's equipment policy — covering tools at the job, in the truck and in transit. Typical forms carry a per-item limit, anything above it listed one by one, and a deductible that makes small hand-tool losses not worth filing. Rented equipment is handled separately.

What a certificate of insurance actually has to say

The ACORD certificate grants no coverage. It is a snapshot of what you carry the day it was issued. What a GC is really asking for are the endorsements on the policy behind it:

• Additional insured, extending your liability coverage to them. Ongoing operations and completed operations are commonly separate endorsements, so a request for both is normal on construction work.
• Waiver of subrogation, stopping your carrier from turning around and suing them.
• Primary and non-contributory, putting your policy ahead of theirs.
• Per-project aggregate, when a client does not want your annual ceiling shared with everyone else's jobs.

Each can carry additional premium, and some carriers will not write all of them for every trade. So "can you send a COI by Monday" is a call to your agent, not a search of your files.

Bonds are not insurance, even when the same agent sells them

A license or permit bond is required for licensing in many states and cities. Performance and payment bonds show up on larger private jobs and on public work, where the contract value that triggers them varies by jurisdiction. All of them protect somebody else — the state, the owner, the subs and suppliers below you. If the surety pays a claim, it has the right to come after you for the money. Insurance moves the risk off you; a bond lends you credit and leaves you on the hook.

What actually moves the premium

No article can tell you what your policy costs. That turns on your state, trade classification, claim history and carrier. What is stable is what each policy is priced on — which tells you what will change the number at audit.

Work with an independent agent who writes contractor policies in your state, and give every carrier the same payroll, receipts and class code so the quotes compare. Ask what is excluded, not just what the limits are — height work, roofing, hot work and excavation all get carved out by some carriers.

Where the premium shows up in your pricing

Your premiums are overhead, like the truck and the phone. They have to sit inside your labor rate before they can be paid out of anything. Add up every premium and divide by the hours you actually bill in a year: $4,800 spread over 1,200 billed hours is $4 an hour that belongs in the rate. Enter that rate once in DoneQuote and the rate covering your insurance is the rate that goes out — whether the next document is an estimate or a change order.

Contractors who get hurt by insurance rarely bought nothing. They bought one policy, assumed it covered everything, and found out on a Thursday afternoon.