Two roofers in the same city, same crew size, same kind of work. One pays noticeably less for coverage than the other. That gap is almost never about finding a generous carrier. It comes down to a short list of inputs insurers price on, and contractors control more of that list than they think.
Carriers rate general liability insurance on six things: the type of work performed, company revenue, number of employees, the amount of coverage requested, the state the business operates in, and prior claims history.
Half of those are fixed. You are not changing your trade or relocating to a cheaper state to shave a premium. The other half is where money gets saved or thrown away.
Certificates from your subs
This is the one that catches people at audit. If you pay a subcontractor and never collect a certificate of insurance from them, your carrier treats that sub as uninsured. Everything you paid them gets added back into your own revenue when the premium is calculated. The same logic applies to workers’ compensation, where 1099 payments you cannot document get counted as payroll.
Run a real share of your work through subs with no paperwork and you are paying premium on that money twice. Once through the sub’s policy, once through your own. Asking for a certificate before the first invoice costs nothing.
Limits you don’t need
If every contract you bid asks for $1 million per occurrence, buying $5 million is money spent on a requirement nobody gave you. Match the limits to what your actual contracts demand, then revisit it when you start bidding bigger work.
The exclusion hiding in the cheap quote
Over the past few years carriers have been attaching the CG 22 94 endorsement to commercial general liability policies. It excludes losses from subcontractor-caused damage to your work, on the theory that the general contractor should eat that as a business loss. Home builders and remodelers see it often.
You can sometimes buy the coverage back, but the buy-back premium varies a lot between carriers, and in a few states it is not offered at all. Which is why comparing two premiums without comparing endorsements tells you almost nothing. The lower number may be lower because it covers less.
Then shop it
Rates for functionally identical operations differ between insurers, and the only way to see that is to look at more than one offer. Brokers who work across multiple A-rated carriers can run a trade through several at once instead of taking the first number back. Contractors Liability® quotes business coverage in around three minutes, often with same-day coverage available, and advertises savings of up to 20% on a policy.
Cheap coverage is not thin coverage. It is coverage priced correctly for the risk of the work, with no exclusions you didn’t know about and no premium charged on subcontractor payments you failed to document.
