Contractor Insurance Requirements
This page separates the three, state by state and trade by trade. Every state figure below was read out of that state's own board application, statute or rule, because the numbers circulating on other insurance pages are frequently lifted from the wrong document. We will show you three where that has happened.
Grit places contractor insurance and surety bonds across the 31 states we write in. If you want the short version for your state and trade, call the Grit team at (801) 505-5500 and we will tell you what your filing actually needs.
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The Three Things People Mean By "Required"
Ask ten contractors what insurance they are required to carry and you will get answers drawn from three unrelated rulebooks. Sorting them out is the whole job, because each one is enforced by a different party with a different remedy when you fall short.
1. What your license requires
Set by the state licensing board, and it is the lowest of the three almost everywhere. Some states name a dollar figure. Many name none at all. Several do not license contractors in the first place, so there is no board to file with. The penalty for getting this wrong is administrative: your application sits, or your license goes invalid.
The trap is that a lapse here is a licensing event, not just an insurance one. Illinois cancels a roofing license with no hearing on proof that coverage lapsed. Nebraska removes you from the registered contractor list. New Mexico treats workers compensation compliance as a condition of license validity, so a comp failure invalidates the license itself. Tennessee makes the license invalid on receipt of a cancellation notice.
2. What your contract requires
Set by the owner or the general contractor, and this is the number that decides whether you can bid. It is written into the subcontract or the bid documents and it does not care what your state minimum is. On commercial work the standard ask is $1,000,000 per occurrence and $2,000,000 aggregate, frequently with an umbrella on top, and the endorsements matter as much as the limits.
The gap between the two layers can be enormous. Oklahoma licenses plumbing, electrical and mechanical contractors at $50,000 of general liability. No commercial general contractor in Oklahoma will let a sub on site at $50,000. Meeting the state minimum and stopping is not compliance, it is an uninsured business that happens to hold a license.
3. What your permit requires
Set by the city or county, and in states with no contractor license it is often the only binding requirement there is. Colorado has no statewide license, so the real bar is municipal: the Pikes Peak Regional Building Department wants $1,000,000 per occurrence and $2,000,000 aggregate, and a lapse suspends your license automatically. Wyoming, New Hampshire and Kansas license no general contractors at all, which pushes the whole question down to city hall and into the contract.
Three Numbers Everyone Publishes That Belong To The Wrong Layer
This is not a theoretical distinction. When we verified all 31 states against primary sources, the most commonly republished figures for three of them turned out to describe something other than a licensing requirement.
Alabama is not $1,000,000 and $2,000,000. Those limits are real, but they come from Article 37 of Division of Construction Management Form C-8, the general conditions attached to Alabama state building contracts. The Alabama Licensing Board for General Contractors asks for "proof of current liability insurance" and names no dollar amount whatsoever. It does require the Board itself as certificate holder, and a minimum net worth and working capital of $10,000.
South Carolina is not $100,000 for contractors generally. That figure applies to burglar and fire alarm registrations and to fire sprinkler contractors. The general and mechanical contractor application requires no insurance at all. Licensure there runs on financial statements or a surety bond instead.
Virginia's per-class general liability minimums do not exist. Several sites publish a figure for Class A, B and C licenses. The Board for Contractors application and its instructions do not mention insurance anywhere. Class A and Class B document net worth of $45,000 and $15,000; Class C has no financial threshold at all.
A pattern worth knowing if you research this yourself: sites on the contractorauthority.com pattern, and others like them, are generated at scale and cite each other. Two of them agreeing is one source, not confirmation. Go to the board's own application.
Written and reviewed by the Grit Insurance Group team · Last reviewed August 13, 2026
Grit is an independent brokerage that places contractor insurance and surety bonds across the 31 states we write in, led by a principal holding the CIC designation with more than 30 years in insurance ownership. We came out of the trades we insure. Every state requirement on this page was verified against that state's own statutes, rules and agency publications, and all of it is subject to current state code. Meet the team or call (801) 505-5500.
What Your State Requires, and Who Has To Be Named
Most contractor insurance pages say requirements vary by state and stop there. They vary in ways that decide whether your filing is accepted. Grit verified these against each state's own statutes, rules and agency publications, and every state links through to the full breakdown.
| State | Liability minimum for licensure | Who must be named, and the catch |
|---|---|---|
| Alabama | Proof of current liability insurance, with no dollar minimum published | The Board itself at 445 Dexter Ave must be the certificate holder, and the insured name must match the applicant exactly. The $1,000,000/$2,000,000 figures you will find quoted are not licensing minimums - they come from Division of Construction Management Form C-8 Article 37, which governs state building contracts. Minimum net worth and working capital of $10,000 to license at all. |
| Arizona | None. A license bond instead, $2,500 to $100,000 by classification and volume | The ROC takes no insurance filing whatsoever. Residential contractors additionally pay into the Residential Recovery Fund or post a second bond of $200,000. Bond amount steps with contemplated gross volume, so growing past a threshold means raising the bond. |
| California | None for most licensees. LLCs: $1,000,000 cumulative, rising $100,000 per person of record above five, capped at $5,000,000 | B&P 7071.19, and the policy must come from an admitted California insurer or an approved surplus lines carrier. Every licensee posts a $25,000 bond; LLCs add a $100,000 employee bond. C-8 concrete, C-20 HVAC, C-22 asbestos, C-39 roofing and C-61/D-49 tree service must carry workers comp even with zero employees. |
| Colorado | GL $1,000,000 per occurrence and $2,000,000 aggregate at PPRBD; Fort Collins $2,000,000 aggregate | There is no statewide license, so this is municipal. A lapse suspends the license automatically at PPRBD, and Fort Collins keeps a license current only while bond and insurance are. One PPRBD filing covers nine jurisdictions. |
| Georgia | GL $300,000 residential-basic, $500,000 light commercial and commercial | The Board in Macon as certificate holder. Binders, information pages, policies and declaration pages are all refused - it must be a signed certificate, and an individual applicant must be the named insured, not their company. Workers comp at three or more employees. |
| Idaho | GL $300,000 single limit, including products and completed operations | From an Idaho-authorized insurer. A floor set in 2006 and never raised, so treat it as the registration minimum rather than the coverage decision. No bond at all. |
| Illinois | Roofing: $250,000 property damage and $500,000 bodily injury, each occurrence | The license is cancelled without a hearing on the termination date of your bond, and on proof that insurance lapsed. No grace period. The amounts live in the rule at 68 Ill. Adm. Code 1460.20, not in the statute that most pages cite. |
| Kansas | Roofing registration: a liability certificate of not less than $500,000 | K.S.A. 50-6,125, and it is filed with the Attorney General rather than a licensing board, which is why roofers looking for a contractor board never find it. Kansas licenses no general contractors, so roofing carries the only statewide insurance minimum. Cities license separately. |
| Louisiana | GL $100,000 residential and home improvement, $50,000 mold remediation | A liability trust fund at the same amount is accepted instead of a policy. Commercial applicants file no insurance certificate at all. Workers comp required alongside. |
| Maine | None required for licensure | Maine licenses no general contractors at all. It regulates the contract instead, and a home construction contract over $3,000 must be written, with the down payment capped at one third of the price. |
| Michigan | None required for licensure | The widely quoted $100,000 figure is not in the law, and the statute it is cited to is about an unlicensed builder being unable to sue for payment. Nothing filters your competitors, so your own certificates carry the whole burden. |
| Mississippi | GL $300,000 per occurrence and $600,000 aggregate | MSBOC as certificate holder, and the insured name must match the license name exactly. Workers comp at five or more employees. A Certificate of Responsibility holder must also disclose to the owner at signing whether they carry GL, in type larger than the rest of the contract. |
| Missouri | Statewide electrical license: $500,000 liability | And a bond posted with every political subdivision you work in. The state license removes local exams, never local bonds. Outside electrical there is no state license and no state minimum. |
| Montana | Montana-issued workers compensation | Montana does not accept another state's workers comp in construction. Your home-state policy does not travel, and contractors from Idaho, Wyoming and the Dakotas discover it after winning the job. |
| Nebraska | Workers compensation only, on an ACORD 25 | Department of Labor as certificate holder. If the coverage lapses you are removed from the registered contractor list until your agent files a current certificate. |
| Nevada | No GL minimum. Workers compensation is a condition of licensure | Industrial insurance compliance, or a signed exemption affidavit, must be on file to issue a license, to activate an inactive one, and to renew. An active license without comp on file is not a valid license. The license bond scales with your limit, and the Residential Recovery Fund covers homeowners in place of a GL mandate. |
| New Hampshire | None. No state general contractor license exists | Only electricians and plumbers are licensed statewide, so there is no board to file a certificate with. Requirements come from municipalities and from the owners and general contractors who hire you, which in practice means the contract sets your limits. |
| New Mexico | No general liability minimum in the rule | But workers comp compliance is a condition of license validity under Section 60-13-23, so a comp failure invalidates the license. Every license also carries a $10,000 bond, and it is a code bond rather than a contract bond. |
| North Carolina | None. The Board states there is no insurance requirement for licensing | Financial responsibility instead: working capital of $17,000 limited, $75,000 intermediate, $150,000 unlimited. A surety bond substitutes for the working capital entirely at $175,000, $500,000 and $1,000,000. Workers comp is still North Carolina law, it is simply not a license condition. |
| North Dakota | A liability certificate naming the Secretary of State as certificate holder | Plus Workforce Safety and Insurance verification. No dollar minimum is published, so the certificate itself is the requirement. |
| Ohio | $500,000 contractor liability insurance | Must sit in one contracting company name. The figure is set by the licensing board and published on its application, not fixed in the Revised Code, so confirm it at renewal rather than assuming last year's number. |
| Oklahoma | $50,000 GL per plumbing, electrical or mechanical license | CIB as certificate holder, and both the bond and the certificate must be in the individual license holder's name, not the company's. $50,000 is far too low for real commercial MEP work - meeting the minimum and stopping is the exposure. |
| Oregon | Scaled to your endorsement: residential $100,000 to $500,000 per occurrence, commercial $500,000 per occurrence to $2,000,000 aggregate | The CCB pairs every bond amount with an insurance amount, so the two move together. Hold both a residential and a commercial endorsement and you file two bonds but one policy, written at the higher of the two amounts. Commercial General Contractor Level 1 is an $80,000 bond with $2,000,000 aggregate; a number of surety sites publish $75,000 for it, which is out of date. |
| Pennsylvania | $50,000 personal injury and $50,000 property damage | HICPA registration through the Attorney General, required of anyone doing more than $5,000 of home improvement work a year. Registration is not a license - no exam, no financials, no experience - but your PA number must appear on every advertisement, contract, estimate and proposal, and non-compliance can make the contract unenforceable. |
| South Carolina | None for general or mechanical contractor licensure. Alarm and fire sprinkler registrations: $100,000 | That $100,000 gets quoted as though it covers every South Carolina contractor. It does not. GC and MC licensure runs on financials or a bond: Group 1 is a $20,000 bond for a $100,000 job limit, through Group 5 at $350,000 for unlimited. The bond is a full substitute for the CPA financial statement. |
| Tennessee | GL scaled to your monetary limit, plus workers comp unless exempt | The board publishes the schedule separately from the statute, so confirm the tier that applies to your limit rather than assuming. New since July 1, 2026: a bond of at least 50% of your monetary limit can replace the CPA-reviewed or audited financial statement entirely. Monetary limit is 10 times the lesser of working capital or net worth. |
| Texas | Air conditioning and refrigeration: Class A $300,000 per occurrence and $600,000 aggregate; Class B $100,000 and $200,000 | No state general contractor license exists, so most trades face no state insurance minimum at all. The licensed trades do, and TDLR will not issue without it. |
| Utah | GL $1,000,000 per incident and $2,000,000 total | DOPL as certificate holder, plus workers comp or a Labor Commission waiver. Raised from $100,000/$300,000 effective April 20, 2026. The $3,000,000 aggregate you may have read about was the original proposal and was pulled back. |
| Virginia | None. Class A and B document net worth or equity instead: $45,000 and $15,000 | A financial statement, a CPA review or audit, or a surety bond on the Board's own form - any one of the three satisfies it. Class C has no financial threshold at all. Third-party sites publish per-class GL minimums for Virginia that appear nowhere in DPOR's application or instructions. |
| Washington | GL $200,000 public liability plus $50,000 property damage, or $250,000 combined single limit | L&I as certificate holder. Washington runs a monopolistic workers comp system, so comp comes from the State Fund and never from a private carrier. Specialty contractors also post a $15,000 bond, general contractors $30,000. |
| Wyoming | None. No state contractor license exists | Cities and counties license instead, so the requirement changes by jurisdiction rather than at the state line. Casper, Cheyenne and Laramie each run their own program. Plan coverage around the owner's contract, because no state floor is going to set it for you. |
Three patterns travel to any state you work in. A lapse is a licensing event, not just an insurance one, and several states suspend or de-register automatically with no hearing. The certificate holder is state-specific, so naming the wrong entity gets the filing rejected even when the coverage is right. And in a growing number of states a surety bond is an accepted substitute for the financial statement - North Carolina, South Carolina, Virginia and, since July 2026, Tennessee all let a bond stand in place of CPA-prepared financials or a working capital test. That turns a bond into a way to qualify for a license, not just a box to check after you have one.
Grit verified every row above in all 31 states we write in, from each state's own statutes, rules and agency publications rather than from other insurance blogs. Several of the figures circulating online are misattributed - Alabama's are lifted from a state construction contract form, South Carolina's from a specialty registration, and Virginia's do not exist. Call (801) 505-5500 and we will confirm what your state actually requires before you file.
What The Contract Requires, And Why The Endorsements Matter More Than The Limit
Once your license is satisfied, the binding requirement comes from the contract. Limits are the easy part. The endorsements are where subs get rejected at the certificate stage after the job is already awarded.
- Additional insured. The owner or GC wants to be an insured on your policy, not merely a certificate holder. A certificate naming them as holder gives them nothing. This takes an endorsement.
- Completed operations for the additional insured. Ongoing operations is the default. Coverage after you leave the site is a separate endorsement, and owners increasingly ask for both. Read which form is attached.
- Primary and non-contributory. Without it, your carrier can argue the upstream policy shares the loss. Contracts routinely require your policy to go first and alone.
- Waiver of subrogation. Stops your carrier chasing the party you agreed not to pursue. Required on most commercial subcontracts.
- Per project aggregate. One aggregate across every job means an unrelated claim can exhaust the limit you promised on this one. Owners on larger work often require the aggregate to apply per project.
- Notice of cancellation. Contracts specify a notice period, and several states set one for licensing too. Tennessee asks for at least 10 days to the Board.
A limit that satisfies the contract with none of these endorsements will still fail the compliance review. If you have been asked for a certificate and told it was wrong without being told why, this list is usually the reason. Grit reads the actual insurance exhibit before quoting, because the exhibit is the requirement.
Where There Is No State License, The City Sets The Bar
Five of the states we write in license no general contractors: Colorado, Kansas, Maine, New Hampshire and Wyoming. Michigan licenses builders but requires no insurance to do it. In every one of those, the requirement is set locally or by contract, and it changes across county lines rather than at the state border.
Colorado is the clearest worked example. There is no state license, so requirements come from regional building departments. One filing with the Pikes Peak Regional Building Department covers nine jurisdictions at $1,000,000 per occurrence and $2,000,000 aggregate, and a lapse suspends the license automatically. Fort Collins runs its own program and keeps a license current only while both bond and insurance are. A contractor working the Front Range can be compliant in one city and unlicensed in the next.
Kansas is the odd one. It licenses no general contractors, but roofing contractors must register with the Attorney General and file a liability certificate of not less than $500,000 under K.S.A. 50-6,125. Roofers looking for a contractor board never find it, because there is not one.
Requirements By Trade
Licensing is trade-specific in most states, and so is the insurance attached to it. Texas licenses no general contractors but sets air conditioning and refrigeration minimums through TDLR. Illinois names roofing specifically. Oklahoma covers plumbing, electrical and mechanical. Missouri's only statewide license is electrical. California requires workers compensation from concrete, HVAC, asbestos, roofing and tree service contractors even with zero employees.
Each page below carries the full 31-state table plus the coverages that trade actually needs, and the class codes underwriters will ask about.
- General contractor
- Electrical
- Plumbing
- HVAC
- Roofing
- Concrete
- Excavation
- Drywall
- Painting
- Flooring
- Landscaping
- Public works
Four States Where A Bond Replaces Your Financial Statement
This is the part most insurance pages miss entirely, and it is worth real money to a contractor whose balance sheet is not ready for a CPA review.
Several boards do not require insurance for licensure at all. They require proof of financial responsibility instead, and in four of the states we write in a surety bond is an accepted substitute for the financials.
| State | What the bond replaces | Amount |
|---|---|---|
| North Carolina | The working capital test entirely | $175,000 limited, $500,000 intermediate, $1,000,000 unlimited |
| South Carolina | The CPA financial statement | $20,000 for a $100,000 job limit, up to $350,000 for unlimited |
| Virginia | The net worth documentation | The Board's own surety bond form, Class A and B |
| Tennessee | The CPA-reviewed or audited financial statement, new since July 1, 2026 | At least 50% of the monetary limit requested |
That turns a bond into a way to qualify for the license, not a box you check after you have one. It is also the reason we treat surety and insurance as one conversation rather than two departments. If your financials are the thing standing between you and a bigger license limit, the bond may be the shorter path.
Tennessee deserves a note because it is the most mechanical. The monetary limit on a Tennessee license is generally ten times the lesser of your working capital or net worth, and the general liability minimum steps with it under Rule 0680-6-.02: $100,000 up to a $500,000 limit, $500,000 from $500,001 to $1,500,000, and $1,000,000 once the limit passes $1,500,001. It is the closest thing in any state to a published bonding-capacity formula. See the Tennessee bond page for the full mechanic, or all 31 states.
Tell us the state, the trade, and the contract
We will read the insurance exhibit, tell you what your license actually requires, and build the program to satisfy both. No guessing from a state minimum that was never the real bar.
Call the Grit team: (801) 505-5500
Frequently Asked Questions
What kind of insurance should a general contractor have?
General liability is the foundation, and on commercial work it is normally written at $1,000,000 per occurrence and $2,000,000 aggregate with completed operations matching the occurrence limit. Around it a general contractor usually needs workers compensation, commercial auto, inland marine for tools and equipment, builders risk on projects where you carry it, and an umbrella to reach the limits owners ask for. Surety bonds sit alongside the insurance rather than inside it. Which of these your state requires for the license is a separate and much shorter list.
Does my state require general liability insurance to get a contractor license?
It depends on the state, and roughly a third of the ones we write in do not. Utah requires $1,000,000 per incident and $2,000,000 total. Ohio sets $500,000. Georgia, Idaho and Mississippi sit at $300,000. Oklahoma requires only $50,000. North Carolina, South Carolina, Virginia, Arizona, Michigan and Maine require no insurance for licensure at all, and Nevada requires workers compensation but no general liability. The full table on this page lists all 31 states with the figure and who must be named.
Who has to be named as the certificate holder?
It varies by state and naming the wrong entity gets the filing rejected even when the coverage is correct. Utah names DOPL, Washington names Labor and Industries, Georgia names the Board in Macon, Mississippi names the MSBOC, Tennessee and Alabama name their contractor boards, and North Dakota names the Secretary of State. Several states also require the insured name to match the license name exactly, and Georgia refuses binders, policies and declaration pages, accepting only a signed certificate.
Do 1099 contractors need general liability insurance?
No state licensing board issues a license on the basis of how a worker is paid, so the requirement comes from the contract instead. In practice almost every general contractor and owner requires an independent contractor to carry their own general liability before they are allowed on site, and will ask to be added as an additional insured. If you do not carry your own policy you are relying on someone else's, which usually means the hiring party's carrier can pursue you after a loss. Questions about whether a worker is properly classified as a contractor or an employee should go to an employment attorney.
Is a surety bond the same as insurance?
No, and the difference matters for licensing. Insurance protects you against your own losses. A bond protects the public or the project owner, and if the surety pays a claim you are required to reimburse them. That is why a bond is underwritten more like credit than like insurance. Many states require both, some require only a bond, and a few accept a bond in place of the financial statement that would otherwise set your license limit.
Can a surety bond replace my financial statement for licensing?
In four of the states we write in, yes. North Carolina accepts a bond of $175,000, $500,000 or $1,000,000 in place of the working capital test. South Carolina accepts $20,000 through $350,000 depending on the group limit you want, in place of the CPA financial statement. Virginia accepts a bond on the Board's own form instead of net worth documentation for Class A and B. Tennessee, since July 1, 2026, accepts a bond of at least 50% of the monetary limit requested in place of a CPA-reviewed or audited statement.
What happens if my insurance lapses?
In several states it is a licensing event rather than an insurance one, and it happens without a hearing. Illinois cancels a roofing license on the termination date of the bond and on proof that insurance lapsed, with no grace period. Nebraska removes you from the registered contractor list until a current certificate is filed. Tennessee makes the license invalid on receipt of a cancellation notice and may open a complaint. Colorado's Pikes Peak Regional Building Department suspends automatically. Treat a cancellation notice as a licensing emergency.
How much does $1,000,000 in contractor insurance cost?
There is no single answer, because the same limit prices very differently depending on your trade, payroll and revenue, claims history, how much work you subcontract, and the legal climate where you operate. Roofing, excavation and electrical price well above painting or landscaping at identical limits. Anything you see presented as a flat national figure is an average of businesses that are nothing like yours, and your actual premium will vary with underwriting results. Call the Grit team and we will price your operation rather than a category.
