A general contractor carries the whole project's risk, including work you did not do yourself.

Oregon requires every licensed contractor to carry liability insurance and a surety bond. A residential general contractor holds a $25,000 CCB bond and at least $500,000 per-occurrence general liability, and commercial general endorsements require more (Oregon CCB).

Why a general contractor's biggest risk is the work of others

A true general contractor spends most of the day coordinating subcontractors, not swinging a hammer. That is exactly where the risk lives. You sign the prime contract, so you carry responsibility for the site, for the trades working on it, and for the finished result long after everyone has gone home. When a sub is uninsured, or a defect turns up two years after closeout, it lands on you first.

Because of that, your supervisory payroll usually falls under workers comp class code 5606, for construction executives and project managers, while any hands-on labor you keep in house is rated on its own trade code. Your general liability is commonly rated on your receipts, or on payroll plus the cost of the work you subcontract, which is why how you handle subs drives your premium as much as your protection.

What each coverage actually does for you

General liability is the base, and for a GC it has to include products and completed operations, the part that responds to a construction-defect claim after the job is finished. Workers compensation covers your own crew and supervisors, and it is also where an uninsured subcontractor gets charged to you at audit. Commercial auto covers the trucks and the drive to the jobsite.

Builders risk covers a project while it is under construction, against fire, theft, and weather, and on many jobs the GC carries it. An umbrella adds limit above the whole program, which commercial contracts routinely require. The one coverage most general contractors do not need is professional liability, unless you take on design-build or design responsibility the owner relies on. If you do, that is a real gap general liability will not fill.

Subcontractors: the exposure that decides your premium

If you want to know why a contractor's audit came back high, look at subcontractors first. When an auditor finds a sub you paid but cannot find a valid certificate of insurance for, they treat that sub as your own uninsured payroll and add it to your bill at your rate. A busy season of paying uninsured helpers can add thousands to your audited premium.

The fix costs nothing and works every time. Require every subcontractor to carry their own general liability and workers comp, collect a certificate before they start, confirm the coverage was in force for the dates they worked, and get named as additional insured with a waiver of subrogation. A certificate alone proves little. The additional-insured endorsement behind it is what actually transfers the risk.

What it costs, and what moves the number

Pricing spreads widely for general contractors, so treat any single figure with caution. As a reference point, a small general contractor often sees general liability somewhere from about $1,500 to $6,000 or more a year, with workers comp priced separately on payroll. Your own number depends on real details:

• Revenue and how much you subcontract. GL is commonly rated on receipts or on payroll plus subcontracted cost, so both move the price.
• Project type. Commercial and residential work price differently, and residential construction can carry its own surcharges and exclusions.
• Limits your contracts require. A job that demands $5 million and additional-insured status costs more to satisfy than a $1 million minimum.
• Loss history. Prior claims follow you through your experience modification and renewal pricing.
• Subcontractor controls. Carriers price more favorably when you consistently require and collect coverage from your subs.

The exclusions and gaps that bite general contractors

This is the part a brochure skips, so we will not. A general liability policy that was not built for construction can leave you exposed in ways you find only at claim time. The common ones:

• Subcontractor warranty exclusions. Some GL policies limit or exclude claims from subcontracted work unless the sub carried its own coverage at required limits and named you additional insured. Miss that and a sub-related claim can be denied.
• Residential construction exclusions. Some markets exclude or restrict new residential work, and you can be sold a policy that does not cover the projects you actually build.
• Your-work and completed-operations limits. Defect coverage has to stay in force at adequate limits to respond to work you did in prior years.
• Design or professional exposure. If you take on design-build, general liability does not cover design errors.

None of these are reasons to panic. They are reasons to have the policy read against the work you actually do and the contracts you actually sign, before you bind.

Licensing, bonds, and contracts by state

Requirements vary across the western states we serve, so confirm yours rather than assuming. In Oregon, the CCB separates residential and commercial endorsements, each with its own bond and insurance minimums; a residential general contractor posts a $25,000 bond with $500,000 liability, while commercial general endorsements require more. In California, general building work falls under the CSLB “B” classification and a $25,000 contractor bond (CSLB). Beyond licensing, your contracts drive coverage: additional insured status, waiver of subrogation, and primary and noncontributory wording are common, and the endorsements behind them have to actually be on your policy. Your state page below has the local specifics.

How a market check usually plays out

General contractor risk is placed carefully, because the carrier is taking on the whole project, subs included. The value of an independent agency here is twofold: reaching the construction markets that want your class and size, and reading your contracts so the risk transfer actually holds. On a GC account the difference between one expensive quote and the right program is usually the market access and the contract review, not the down payment.

Questions to ask before you buy a general contractor policy

• Is my general liability written with products and completed operations at the limits my contracts require?
• How is my policy set up so uninsured subcontractors do not land on my audit?
• Does my GL restrict or exclude the residential or commercial work I actually do?
• Do I have the additional-insured and waiver-of-subrogation endorsements my jobs require, not just certificates?
• Is my umbrella limit enough to meet the largest contract I am likely to sign?