Insurance is the piece most new contractors delay until something forces their hand — a commercial client requiring a certificate, a close call on a job, or a friend getting sued. Don’t wait for any of those. The cost of getting insured is a fraction of the cost of a single uninsured incident, and operating without coverage is one of the fastest ways to lose everything you’ve built.
This guide maps every coverage type relevant to exterior home service contractors, what each one costs, and what happens when you skip it.
Before your first paid job, you need general liability insurance and commercial auto if you’re towing equipment. Everything else can follow as your business grows — but those two are not optional from day one.
Every Coverage Type — What It Is and What It Costs
Covers property damage and bodily injury caused by your work. The foundation of every contractor’s coverage stack. Required by most commercial clients and HOAs before you step on their property.
Full Guide →Your personal auto policy will not cover accidents while towing commercial equipment or driving for business purposes. Required the moment you use a vehicle commercially.
Full Guide →Required in most states once you have employees. Covers medical costs and lost wages for work-related injuries. Threshold varies — some states require it from the first employee, others from the third.
Full Guide →Covers your equipment in transit and at job sites. Standard property insurance won’t cover a grinder stolen from a client’s driveway. If the equipment is your business, this coverage is essential.
Full Guide →A bond guarantees you’ll complete the work or the client gets compensated. Required by some commercial clients and municipalities. Also signals professionalism and protects against employee theft claims.
Full Guide →Extends your liability limits above your general liability and commercial auto policy caps. Worth considering once your revenue justifies the exposure — typically when you have employees or significant equipment.
Full Guide →What a Basic Coverage Package Costs
Here’s what a typical solo exterior home service contractor pays in year one for a minimum viable coverage stack.
| Coverage | Annual Cost (Low) | Annual Cost (High) |
|---|---|---|
| General Liability ($1M/$2M) | $400 | $1,500 |
| Commercial Auto | $1,000 | $3,000 |
| Inland Marine (equipment) | $200 | $600 |
| Surety Bond ($10K–$25K) | $100 | $300 |
| Total — Solo Operator, No Employees | $1,700 | $5,400 |
Workers’ compensation adds significantly to this cost once you have employees — rates are based on payroll and trade classification and vary widely by state.
Ask your broker about a Business Owner’s Policy (BOP). A BOP bundles general liability and inland marine into a single policy — usually cheaper than buying them separately. Not every insurer offers BOPs for all contractor trades, but it’s worth asking before you price them individually.
Insurance Requirements by Trade
| Trade | GL Required? | Commercial Auto? | Trade-Specific Notes |
|---|---|---|---|
| Lawn Care | Yes | Yes (if towing) | Chemical application may require separate pesticide liability rider |
| Landscaping | Yes | Yes | Installation work increases exposure — higher GL limits often needed |
| Pressure Washing | Yes | Yes (if towing) | Chemical soft washing may require additional riders |
| Tree Service | Yes — higher limits | Yes | Tree work is high-risk — expect significantly higher GL premiums |
| Stump Grinding | Yes | Yes | Inland marine essential — grinder is expensive and travels to every job |
| Hardscaping | Yes | Yes | Structural work increases liability exposure vs. maintenance trades |
The Certificate of Insurance — What It Is and Why It Matters
A Certificate of Insurance (COI) is a one-page summary document your insurance carrier issues that proves you’re covered. Commercial clients, HOAs, property management companies, and municipalities require it before allowing you on their property.
Getting a COI is free and takes minutes — your carrier or broker emails it to you or directly to the requesting party. The problem is that many new contractors don’t know to ask for one until a commercial client demands it at the last minute. Set up your COI process on day one so you can produce it on request without scrambling.
→ Full Guide: How to Get a Certificate of Insurance
What Happens Without Insurance
One rock through a client’s window. One employee injury. One vehicle accident while towing. Any of these without proper coverage means the cost comes directly out of your pocket — or more accurately, out of your personal assets. An LLC protects you from business liabilities, but only if you have the coverage behind it to absorb the actual cost.
→ What Happens If You Get Sued Without Insurance
Everything in This Hub
The foundation coverage every contractor needs before job one.
Read the Guide →When it’s required, what it costs, and how to stay compliant.
Read the Guide →Why your personal policy won’t cover you on the job.
Read the Guide →Protecting your equipment in transit and at job sites.
Read the Guide →What bonds cover and when clients or municipalities require them.
Read the Guide →How to get your COI and what it needs to say.
Read the Guide →What to compare, what questions to ask, and where to find brokers.
Read the Guide →Legitimate ways to minimize cost without cutting dangerous corners.
Read the Guide →When to extend your coverage limits beyond your base policies.
Read the Guide →What actually happens — and why it’s worse than most operators think.
Read the Guide →What to require from subs before they work on your jobs.
Read the Guide →What it means, how to add it, and when clients require it.
Read the Guide →General liability and commercial auto are non-negotiable before your first paid job. Inland marine protects the equipment that makes your income possible. Workers’ comp is legally required once you have employees in most states. Get the minimum viable stack in place before you start, add coverage as your revenue and exposure grow, and never let a policy lapse mid-season.
Frequently Asked Questions
What insurance does a contractor need to start?
At minimum: general liability and commercial auto if you’re towing equipment or using a vehicle for business. Inland marine is strongly recommended if you have specialized equipment. Workers’ comp is required once you add employees in most states.
How much does contractor insurance cost per year?
A solo operator’s basic coverage stack — general liability, commercial auto, and inland marine — typically runs $1,700 to $5,400 per year before workers’ comp. Tree service operators pay significantly more due to the elevated risk profile of the trade.
Do I need insurance before I get my first client?
Yes. Get insured before your first paid job. One incident without coverage — a damaged window, a slip-and-fall, a trailer accident — can cost more than a year of insurance premiums in a single event.
What is a certificate of insurance and why do clients ask for it?
A COI is a one-page document from your insurer summarizing your coverage types and limits. Commercial clients, HOAs, and property managers require it to verify you’re covered before allowing you on their property. It’s free to obtain and takes minutes — set up the process before a client asks for it.
Can I use my personal auto insurance for work?
No. Personal auto policies exclude commercial use. If you have an accident while driving to a job, towing equipment, or carrying tools for your business, your personal insurer can deny the claim. Commercial auto is required the moment your vehicle is used for business purposes.
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