Nobody started a trade because they love insurance. You started it to fix things and get paid. But one rough afternoon, a tipped space heater, a helper off a ladder, a supply line that lets go in a finished basement, can swallow everything you’ve built. Insurance is the dull thing that keeps a bad day from being the last one.
The two you can't skip
General liability is the floor. It covers damage you do to other people’s property and injuries to people who don’t work for you. You drop a pipe wrench through a skylight. A homeowner trips over your cords and breaks a wrist. That’s GL, and it pays so you don’t. Most general contractors, property managers, and commercial clients won’t let you set foot on the job without it, and plenty of licensing boards want proof too.
Workers comp is the other one. It covers your people when they get hurt on the clock: medical bills, a chunk of lost wages, rehab. In nearly every state, the day you put your first W-2 employee on payroll, the law says you carry it. Go without and you’re staring at fines, lawsuits, sometimes criminal charges. Even a solo operator gets pulled into it, depending on the state and who’s hiring you.
Here’s what trips people up. Comp premiums ride on your payroll and how each worker is classified, and a roofer costs more to cover than an office admin because roofers work on roofs. Get the classifications wrong and you either overpay every month or eat a nasty bill at the year-end audit. Clean payroll records are what keep that audit boring.
The coverage nobody mentions until the day you need it
Commercial auto first. Your personal truck policy will not cover a wreck you have on the way to a job with a bed full of copper and a trailer behind you. Personal insurers deny business-use claims all the time, and then the other driver’s bumper comes out of your pocket. If the truck works, the truck needs a commercial policy.
Then there are your tools. One smash-and-grab in a gas station lot can cost you five figures in gear before breakfast, and your GL policy doesn’t touch your own equipment. Neither does a shop building policy once the tools leave the shop. What you want is an inland marine policy. Odd name, it’s a leftover from insuring cargo on ships, but it’s the thing that covers tools and equipment wherever they travel.
And an umbrella policy. It sits on top of everything else and kicks in when a claim runs past the limits on your regular coverage. One bad injury suit can blow through a standard liability limit faster than you’d think. For what it costs, umbrella is about the cheapest peace of mind you can buy.
Damage and injury to people and property that aren't your employees. The baseline nearly everyone asks for.
Your crew's medical bills and lost wages when they're hurt on the job. Legally required in most states once you hire.
Work vehicles and trailers. Your personal policy won't cover a business-use wreck.
An inland marine policy covers your gear wherever it goes, including a locked truck overnight.
Extra limits that kick in when a big claim blows past your other policies. Cheap for the protection.
A BOP bundles GL with property coverage and often prices better than buying each piece alone.
What you're paying for twice
Overlap is where trades quietly bleed money. Plenty of owners buy a Business Owner’s Policy that already bundles liability with property coverage, then go buy a standalone policy that covers the same ground again. Read what you’ve already got before you add anything on top.
Gaps cost more than overlap, though, because you think you’re covered right up until you’re not. A sole proprietor waives comp on himself, falls, and spends six months with zero wage replacement. A roofer buys a GL policy that turns out to exclude roofing work in the fine print. The exclusions page is where your real policy lives, so read it before you sign, not after the claim gets denied.
“The exclusions page is where your real policy lives. Read it before you sign, not after the claim gets denied.
Ask your agent to price it against your real trade and your real payroll, trucks included, and get it in writing. An agent who actually knows the trades, and not just small business in general, is worth switching to. They’ll flag the exclusion that matters and skip the add-on you don’t need.
Certificates, audits, and keeping your paperwork straight
The certificate of insurance, the COI, is the one-page proof that you’re covered. General contractors and property managers ask for one before they cut you a check, sometimes before you can even bid. Your agent generates it in minutes. If a client wants to be listed as “additional insured,” that’s a quick endorsement, so don’t let it hold up the job.
When a claim lands or the comp auditor calls, the shop with clean records wins. Dated job photos. A log of what you did and when. Signed change orders that prove the customer approved the work. The outfit that can pull all of that in thirty seconds settles fast and cheap, while the one digging through a truck full of crumpled receipts pays more and waits longer.
ToolbagCRM core records and the optional Documents & Photos plug-in can help you keep information about the work you performed. They do not replace insurance, guarantee a claim outcome, or provide an insurance-claims workflow. Follow your insurer’s record requirements. Free and Founders include unlimited users. See plan terms, plug-in slots, and payment fees.