General Contractor Business Insurance Requirements by State
- Nate Jones, CPCU, ARM, CLCS, AU
- 2 hours ago
- 3 min read
Insurance requirements for general contractors vary significantly from state to state. Whether you’re a nationwide contractor or operate in a specific region, knowing which types of insurance are required based on where you do business is essential for legal compliance, winning contracts, and protecting your company from costly claims.
In this guide, we’ll break down key state requirements for general contractor insurance and explain why carrying the right coverage is critical — and how Wexford Insurance can help you get compliant, affordable policies fast.
Why State Requirements Matter
State insurance requirements for contractors are designed to protect workers, clients, and the public from financial losses related to accidents, injuries, and property damage. Regulatory boards often tie insurance requirements to contractor licensing and permitting, and failing to meet these requirements can result in fines, loss of license, or being unable to bid on projects.
While some states set minimum insurance standards, many require specific coverages such as general liability, workers’ compensation, commercial auto, and in some cases, surety bonds. In many states, local jurisdictions may also impose additional rules.
General Trends in State Requirements
Most states require:
Workers’ Compensation Insurance — Required if you have employees in nearly every state.
General Liability Insurance — Commonly required by licensing boards and commercial clients, with minimum limits that may vary by state and project size.
Commercial Auto Insurance — Required wherever company vehicles are used in construction operations.
Surety / License Bonds — Many states require a contractor bond as part of licensing or to protect project owners.
However, specific requirements and coverage minimums differ widely. Here’s a snapshot of how these requirements play out in different states:
Examples of State Requirements
California
General liability insurance is required for licensing and contract compliance.
Workers’ compensation is mandatory for contractors with employees.
Surety bonds are often required at various levels depending on license and project scope.
Washington
General liability insurance with specified minimum limits (e.g., $200,000 public liability, $50,000 property damage) is mandatory.
Commercial auto coverage is required if vehicles are used for business.
Surety bonds (e.g., $30,000 for general contractors) are part of licensing.
Georgia
General liability insurance is required with limits depending on license classification (e.g., $300,000–$500,000 per occurrence).
Workers’ compensation is mandatory for employers.
Auto insurance and optional bonds may be needed.
Pennsylvania
Contractors doing home improvement over specific thresholds must carry general liability insurance (minimum personal and property coverage).
Workers’ compensation insurance is required for employees.
Texas
There is no statewide requirement for general liability insurance, but local licenses and permits often require it.
Workers’ compensation is not mandated by state law, but employers may choose to carry it for protection.
Kansas & Kentucky
Some states do not have statewide contractor insurance mandates, but local city or county licensing boards may require liability insurance or bonds.
How Wexford Insurance Helps You Stay Compliant
Wexford Insurance specializes in contractor business coverage, helping general contractors:
Understand state‑specific requirements for insurance and bonds
Secure compliant policies with the correct limits
Provide Certificates of Insurance (COIs) required by licensing boards and clients
Compare multiple carriers for the best combination of cost and coverage
FAQs: General Contractor Insurance Requirements
What insurance is legally required for general contractors in my state?
When is proof of insurance required to win construction contracts?
Why does general contractor insurance matter for claims, lawsuits, and accidents?
