Whether you frame houses in Wake Forest, run an HVAC crew out of Garner, remodel kitchens in Cary or paint commercial interiors around downtown Raleigh, insurance is part of how you win work. General contractors, property managers and homeowners increasingly ask for proof of coverage before you set foot on site, and the wrong gap can turn one bad day into a claim you pay yourself.
This guide walks through the policies most Raleigh contractors and trades carry, what North Carolina law says about workers' comp for subcontractors, and what to have ready when you shop. It's general information, not legal advice, a quote or a description of any specific policy.
General liability: the policy everyone asks for
General liability responds when someone says your work or your crew caused bodily injury or damage to their property. Common contractor examples:
- A homeowner trips over your extension cord and is hurt.
- A plumbing fitting you installed fails and water damages the floors below.
- Your crew cracks a neighbor's driveway while backing in equipment.
It usually also pays legal defense costs. Two features matter a lot for contractors:
Completed operations. Claims often show up after the job is done, sometimes long after. Completed operations coverage responds to injury or damage that happens after your work is finished. Check that your policy includes it and that the limits match what your contracts require.
Additional insured endorsements. Most general contractors and many commercial property owners require you to name them as an additional insured. That has to be added to the policy by endorsement. Simply listing them on a certificate isn't the same thing. Some contracts also ask for "primary and non-contributory" wording or a waiver of subrogation. Send the insurance section of your contract to your agent before you sign it.
Watch for exclusions, too. Some contractor policies limit coverage for certain work, such as roofing, residential new construction, or work above a certain height. Make sure the policy matches the work you actually do.
Workers' comp and subcontractors in North Carolina
In North Carolina, businesses that regularly employ three or more employees are generally required to carry workers' compensation. For contractors, the bigger issue is often subcontractors.
Under G.S. 97-19, a contractor who sublets work without getting a certificate of workers' compensation insurance from the subcontractor can be held liable for that sub's injured employees, even if the sub has fewer than three employees. In practice, that means:
- Get a current certificate of insurance from every subcontractor before they start work, and keep it on file.
- Track expiration dates. A certificate that lapses mid-job doesn't protect you.
- Expect a year-end audit. Many insurance companies review your payroll and what you paid subs, and may charge premium for subs who couldn't show their own coverage.
If you're a sole proprietor with no employees, you may not be required to carry workers' comp, but a GC may still require proof of coverage or an exemption before you can work on their jobs. Our guide to workers' compensation in Raleigh covers the rules in more detail.
Tools and equipment: inland marine
Theft of tools from trucks and job sites is a real headache for trades across the Triangle. Your general liability policy doesn't cover your own tools, and a commercial property policy may provide limited or no coverage once equipment leaves your shop.
An inland marine policy, often called a contractor's equipment or tools floater, covers tools and equipment wherever they are: in the truck, on the job, or in storage. Ask about:
- Whether items are covered at replacement cost or actual cash value
- Per-item limits for expensive equipment
- Coverage for rented or borrowed equipment
- Theft conditions, such as whether the vehicle must be locked
Trucks, vans and trailers
Work vehicles belong on a business auto policy. A personal auto policy may exclude or limit coverage when a vehicle is used mainly for business or titled to the company. Commercial auto can also cover trailers, employees driving company vehicles, and hired and non-owned autos when employees use their own cars for supply runs. Tools inside the truck are usually not covered by auto insurance, which is another reason for an inland marine policy. See our guide to commercial auto insurance in Raleigh.
Builder's risk for projects under construction
Builder's risk covers the building and materials during construction or renovation, against causes like fire, theft of materials and wind. Raleigh-area projects regularly deal with summer thunderstorms and the remnants of tropical systems, so wind coverage and deductibles are worth reading closely.
Who buys builder's risk depends on the contract. On many residential and commercial jobs, the owner or the GC carries it. If you're the builder of record on a custom home or spec house, it may be your responsibility.
Bonds
Some public projects, larger commercial jobs and certain local permits require contractor bonds, such as license and permit bonds, bid bonds, or performance and payment bonds. A bond isn't insurance for you. It guarantees to the project owner that you'll meet your obligations, and the surety company expects to be repaid if it pays a claim. Bonding is underwritten on your experience and finances, so it helps to start the conversation before you bid.
Higher limits and an umbrella
Contracts with larger GCs, commercial property managers and public agencies sometimes require higher liability limits than a standard policy provides. A commercial umbrella adds a layer above your general liability, auto liability and employer's liability.
Licensing is a separate requirement
Insurance and licensing go hand in hand, but they're not the same thing. Under G.S. 87-1, North Carolina generally requires a general contractor license for projects costing $40,000 or more. Electrical, plumbing, heating and fire sprinkler contractors are licensed by their own state boards. Check with the board for your trade, and with the local permitting office for any local requirements.
What to have ready for a contractors insurance quote
- Business name, how it's organized and how long you've been in business
- A clear description of your work, residential versus commercial, and any work you never do
- Estimated annual revenue and payroll, broken out by type of work if you can
- What you pay subcontractors each year, and whether they carry their own insurance
- A list of tools and equipment with approximate values
- Vehicles and trailers, with VINs and drivers
- Your current policies and any claims in the last several years
- Sample contracts or the insurance requirements from your main GCs or clients
Talk with a Raleigh independent agency
Shadow Lake Insurance is an independent agency, so we can compare contractor coverage from the insurance companies we represent instead of offering a single option. We'll review your contracts' insurance requirements, help you set up certificates and additional insured endorsements, and point out gaps like tools, completed operations or uninsured subs. If you're still mapping out everything your business needs, see our guide to essential business insurance for Raleigh companies, or learn why some trades don't fit a business owner's policy.
Shadow Lake Insurance 8398 Six Forks Road, Suite 202, Raleigh, NC 27615 (276) 597-9844
Ready to compare? Start a contractors insurance quote or request a quote, or call or text our office.
Sources
- North Carolina General Statutes, G.S. 97-19, subcontractor liability under the Workers' Compensation Act
- North Carolina General Statutes, G.S. 97-2, Workers' Compensation Act definitions
- North Carolina General Statutes, G.S. 87-1, general contractor defined
- North Carolina Licensing Board for General Contractors
- North Carolina Industrial Commission
Coverage subject to policy terms, conditions, and underwriting. This article is general information, not a description of any specific policy or a promise of coverage. Review your policy or talk with us about your situation.