General liability insurance is the foundation of protection for framing contractors. Your coverage limits determine exactly how much your policy will pay when claims arise—and understanding these limits is crucial for your business's survival.
Critical Decision Point
Whether you're framing residential homes or commercial structures, inadequate coverage can mean the difference between a manageable insurance claim and personal bankruptcy.
Standard coverage for framers typically starts at $1 million per occurrence with a $2 million aggregate limit, costing an average of $80 per month. But contract requirements, project size, and your specific risk exposure may demand higher limits.
"Understanding coverage limits isn't optional—it's essential for your business survival."
Questions About Your Coverage Needs?
Get expert guidance on the right limits for your framing operation
What is General Liability Insurance for Framing Contractors?
General liability (GL) insurance protects your framing business from financial loss when third parties are injured or their property is damaged due to your work.
Who GL Insurance Protects
Unlike workers' compensation that covers your employees, GL insurance protects you from liability to:
- Clients and property owners
- Visitors to your jobsites
- Passersby and the general public
- Anyone who isn't on your payroll
What GL Insurance Covers
Bodily Injury Liability
Pays medical expenses, lost wages, and pain and suffering when someone is injured due to your business operations.
Property Damage Liability
Covers the cost to repair or replace others' property that your work damages.
Legal Defense Costs
Your policy pays for attorneys, court costs, settlements, and judgments—even if claims are groundless.
Completed Operations Coverage
Critical for framers—covers liability from work you've already finished and left.
What GL Insurance Does NOT Cover
Important Exclusions
- Employee injuries require workers' compensation insurance
- Auto accidents need commercial auto insurance
- Faulty workmanship repair costs aren't covered (though damage caused by faulty work is)
Understanding GL Coverage Limit Types
General liability insurance includes several different types of limits that work together to cap your insurer's total exposure.
Per-Occurrence Limit Explained
Standard Per-Occurrence Limit
Maximum your insurance pays for a single incident
This limit applies to each separate, distinct event. If one accident results in $1.5 million in total damages, your insurance pays the first $1 million and you're personally responsible for the remaining $500,000.
"Construction claims frequently exceed $1 million. A single serious bodily injury can generate $250,000-$500,000 in medical expenses alone."
General Aggregate Limit Explained
Critical Aggregate Concept
The general aggregate is the maximum your insurance pays for ALL claims during your policy year (typically 12 months).
Once exhausted, you have ZERO coverage for the remainder of your policy period!
Scenario: Aggregate Exhaustion
How Much GL Coverage Do Framing Contractors Need?
"There's no universal answer, but analysis of 15,000+ framing contractors reveals patterns based on revenue, project size, and contract requirements."
Industry Standard Coverage Amounts
Industry Baseline Since 1990s
Per Occurrence / Aggregate
Average cost
This coverage level became standard because it balances adequate protection with affordable cost. Most small to mid-size framers find this sufficient for:
Residential Projects
Single-family homes under $500K value
Small Crews
1-5 employees or subcontractors
When Higher Limits Are Necessary
Consider $2M/$4M or Higher When:
- Working on commercial projects or multi-family developments
- Projects regularly exceed $500K in value
- Annual revenue exceeds $300K-$500K
- GC contracts require $2M+ per occurrence
- You own significant personal assets to protect
FIND THE RIGHT COVERAGE FOR YOUR OPERATION
Our specialists analyze your specific needs and find the best coverage at competitive rates.
Call 1-800-372-6464 • Speak with a specialist today
Coverage Limit Requirements: Contracts and Compliance
"Understanding requirements BEFORE bidding prevents losing profitable jobs due to inadequate insurance."
General Contractor Requirements
Most subcontract agreements specify minimum insurance requirements. Failure to meet these means you cannot legally work on the project.
Typical Contract Insurance Requirements
| Project Type | GL Required | % of Contracts |
|---|---|---|
| Small Residential | $1M / $2M | 75% |
| Custom Homes | $1M-$2M / $2M-$4M | 20% |
| Commercial | $2M-$5M / $4M-$10M | 5% |
Pro Tip
Always read insurance requirements in RFPs and contracts before bidding. Upgrading coverage mid-project is expensive and sometimes impossible.
State Licensing Requirements
Many states mandate GL insurance for contractor licensing, though requirements vary significantly:
States with Requirements
- • Kansas: $1M per occurrence minimum
- • California: GL required for LLCs
- • Connecticut: All contractors need coverage
- • Nevada: Proof required for licensing
No State Requirements
- • Most states don't mandate GL
- • But clients always require it
- • Check local city/county rules
- • Federal projects have requirements
Certificate of Insurance (COI) Process
ACORD 25 Form
The construction industry standard certificate shows:
Request from your agent - usually free within 24-48 hours
"COIs expire when policies expire. Proactively send updated certificates mid-project to avoid payment delays."
Additional Insured Endorsements
Nearly every construction subcontract requires adding the GC or property owner as an additional insured on your GL policy.
How Additional Insured Works
Your framing causes a structural defect that injures someone three years later...
- 1.Injured party sues both you AND the general contractor
- 2.As additional insured, GC gets defense under YOUR policy
- 3.Your insurance covers GC for claims from YOUR work
Standard practice • Usually costs nothing extra • Request before work begins
What Does GL Insurance Cover (and Not Cover) for Framers?
"Understanding exactly what your policy covers—and critically, what it excludes—prevents nasty surprises when claims arise."
What IS Covered
Third-Party Bodily Injury
Covers medical expenses, lost wages, pain and suffering for anyone except your employees:
Common Scenario 1
Delivery driver slips on debris, breaks wrist
Common Scenario 2
Homeowner struck by falling 2x4, concussion
Property Damage Liability
Pays to repair or replace others' property your work damages:
Completed Operations Coverage
Protection after project completion
Critical for structural framing liability
Legal Defense Costs
Your most valuable coverage - pays ALL legal expenses:
Average Defense Cost
$50K-$150K
Coverage Feature
Doesn't count against policy limits!
What Is NOT Covered
Critical Exclusions
Employee Injuries
Requires workers' compensation, not GL
Auto Accidents
Need commercial auto insurance separately
"Your Work" Exclusion
Won't pay to fix YOUR faulty work (but covers damage it causes)
"GL insurance will NOT pay to rebuild your incorrectly framed wall, but WILL pay for the HVAC, electrical, and drywall damage when it collapses."
Cost of GL Insurance by Coverage Limit
"General liability insurance is one of the most affordable protections relative to the risk it covers."
Average Costs by Coverage Level
Standard Coverage
$1M / $2M
$80/mo
($960/year)
Solo Operators
Starting at $55/mo
Small Crews (2-5)
$70-100/mo
% of Revenue
0.89-2.19%
✓ 90%+ of small contractors choose this level
Enhanced Coverage
$2M / $4M
$95-120/mo
($1,140-$1,440/year)
Cost per additional million: $180-480/year
Commercial Umbrella Coverage
Additional coverage over base GL - extremely cost-effective
$1M Umbrella
$750-1,000/yr
($63-83/mo)
$2M Umbrella
$1,200-1,500/yr
($100-125/mo)
$3M Umbrella
$1,600-2,000/yr
($133-167/mo)
$5M Umbrella
$2,000-2,500/yr
($167-208/mo)
Factors That Affect Your Premium
Primary Rating Factors
- 📊 Annual Revenue: Higher revenue = higher premium
- 👥 Payroll & Employees: More workers = more risk
- ⚠️ Claims History: Clean record saves 15-30%
- 📅 Years in Business: 5+ years earns discounts
- 📍 Location: CA/NY cost 50-100% more
Discount Opportunities
- ✅ Safety Program: 15-20% discount
- ✅ OSHA Certification: 5-10% discount
- ✅ Drug-Free Workplace: 5-10% discount
- ✅ Higher Deductible: 10-20% savings
- ✅ Bundle Policies: 10-15% discount
How to Lower Insurance Costs
Maintain Clean Claims History
Every year without claims improves rating. Minor claims under $5K may cost more in increased premiums than paying out of pocket.
Implement Formal Safety Program
Document protocols, hold safety meetings, inspect equipment regularly for 15-20% discounts.
Shop Multiple Carriers Annually
Rates vary significantly. Work with independent agents representing multiple carriers.
Determining the Right Coverage Limits for Your Framing Business
"Choosing appropriate coverage requires balancing cost against protection. Too little creates catastrophic risk. The right amount protects without unnecessary expense."
Step-by-Step Coverage Selection Process
Assess Contract Requirements
Review all current subcontracts and identify highest limits required.
If GCs require $2M/$4M, that's your baseline to compete.Evaluate Risk Exposure
Consider worst-case scenarios for your typical projects.
Example: $750K home + structural failure = $1.5M-$2M total claim
Review State Requirements
Check licensing board for mandated minimums in all jurisdictions.
Many public projects have specific requirements beyond commercial standards.
Consider Your Assets
What would you lose if underinsured?
- • Business equipment & vehicles
- • Personal home & savings
- • Future wages (can be garnished)
Consult a Specialist
Work with agents having CRIS designation (Construction Risk Insurance Specialist).
Request quotes for multiple options: Compare coverage breadth, not just price.
Decision Framework
Choose $1M/$2M if:
- ✓ Small residential projects (<$500K)
- ✓ Annual revenue under $300K
- ✓ Solo or 1-2 employees
- ✓ No higher contract requirements
- ✓ Have adequate umbrella coverage
Choose $2M/$4M if:
- ✓ Mixed residential/commercial
- ✓ Revenue $300K-$1M
- ✓ Employ 3-10 framers
- ✓ Some contracts require higher
- ✓ Projects exceed $500K value
Choose Umbrella if:
- ✓ Large commercial projects
- ✓ Revenue exceeds $1M
- ✓ Need $3M-$5M total coverage
- ✓ Significant assets to protect
- ✓ Want max protection at best cost
Real Claims and Why Adequate Limits Matter
"Understanding real claim scenarios illustrates why coverage limits matter and what happens when limits prove inadequate."
Common Claim Scenarios for Framers
Property Damage Claims
Dropped Saw on Flooring
Blade-first into Brazilian cherry hardwood
400 sq ft replacement
Beam Falls on Mercedes
30-foot glulam slips during crane work
Total vehicle loss
Storm Damage to Neighbors
Unsecured lumber damages 5 homes
Windows, siding, landscaping
Wall Collapse
Insufficient bracing during high winds
HVAC, electrical, plumbing damage
Bodily Injury Claims
Escalating Injury Costs
Visitor trips on cord
Fractured ankle, surgery needed
$75,000
Medical + lost wages + pain
Falling 2x4 strikes pedestrian
Concussion, permanent cognitive effects
$250,000
Settlement
Electrician falls through opening
Severe back injuries, multiple surgeries
$380,000
Medical + disability
Hammer strikes delivery driver
Facial fractures, eye damage
$425,000
Medical + disfigurement
Completed Operations Claims
"These claims occur YEARS after you've finished and left the jobsite—but you're still liable!"
18 Months Later: Wall Framing Defect
Load-bearing wall 30% under-strength, discovered during remodel
Structural repairs + engineering
2 Years Later: Roof Truss Failure
Missing hurricane clips lead to windstorm damage
Roof + interior + temporary housing
14 Months Later: Floor Collapse
24" joist spacing instead of required 16" causes failure
$180K repairs + $75K injury + $65K contents
The Cost of Underinsurance
Real-World Catastrophe
A framing contractor with standard $1M/$2M coverage faced a $1.8 million claim when structural defects caused partial building collapse during construction.
Forced to:
- • Sell all business equipment and vehicles
- • Liquidate retirement savings
- • Take second mortgage on home
- • Declare bankruptcy ultimately
- • Permanently left construction industry
"The difference between $1M and $2M coverage? About $15-40 per month. The cost of being underinsured? Everything you've built."
DON'T GAMBLE WITH YOUR FUTURE
Get the right GL coverage limits for your framing business. Our construction insurance specialists will analyze your needs and find competitive rates.
Call 1-800-372-6464 • Speak with a specialist today
Safety Programs Reduce Premiums
Documented safety practices can save 15-30% on insurance costs