The three policies that matter
Insurance is where new owners either overthink it or skip it entirely. Here's the short version of what you actually need, in order.
1. General liability (GL) — non-negotiable
GL covers third-party bodily injury and property damage — the customer's house, the customer's body, the neighbor's fence. Standard limits are $1M per occurrence / $2M aggregate, and that's what most general contractors and homeowners will require before they let you on site.
This is the policy that gets you work. A certificate of insurance (COI) naming the GC or homeowner as additional insured is a routine ask on commercial jobs. No COI, no job. Budget roughly $50–$150/month depending on trade and revenue.
2. Commercial auto — on any truck you use for work
Your personal auto policy will not cover an accident that happens while you're driving to a job or hauling materials. If you're using the vehicle for the business, you need a commercial auto policy. Expect $100–$200/month per vehicle. Skipping this is one of the most common — and most expensive — mistakes solo operators make.
3. Workers comp — the day you hire employee #1
The moment you have a W-2 employee, most states require workers compensation. It covers medical costs and lost wages if an employee is hurt on the job. Rates depend on your trade's risk class and total payroll, so roofing costs far more than low-voltage work. In many states you're also required to carry it on yourself once you incorporate — check your state's rules.
What you can skip at first
- Tools and equipment coverage (inland marine) is worth adding once you've got real money in tools, but it's not a day-one requirement.
- An umbrella policy comes later, when you're chasing bigger commercial contracts that demand higher limits.
How to buy it
Use an independent agent who knows the trades, not a generic online quote. A good agent bundles GL + commercial auto, knows which carriers like your trade, and turns around COIs fast when a GC needs one same-day. The cheapest premium is worthless if you can't get a certificate when a job is on the line.
Add it all up and a typical solo operator runs $150–$300/month in core coverage. That's the cost of being allowed to do the work — price it into your rates from job one.