Running a flooring installation business means managing tight margins, demanding clients, and the constant risk of something going wrong on a job site. One scratched hardwood floor or injured worker can wipe out months of profit if you're not properly insured. Yet many flooring contractors piece together coverage reactively—adding policies only when a client demands proof of insurance or after a close call.
This checklist cuts through the confusion. Whether you're a solo installer handling residential jobs or running a crew on commercial projects, you'll know exactly which coverages you need now, which ones to add as you grow, and how to review your policies annually to avoid gaps that could sink your business.
Essential Coverage: What Every Flooring Installer Needs
These aren't optional. If you're installing flooring professionally, you need these four policies in place before you touch your first job:
General Liability Insurance is your baseline protection. It covers property damage and bodily injury claims from your work. If you're grinding a concrete floor and sparks catch a drop cloth on fire, causing $30,000 in damage, general liability handles it. If a homeowner trips over your tools and breaks their wrist, it covers their medical bills and your legal defense. Most flooring contractors pay around $63 per month for $1 million per occurrence and $2 million aggregate coverage. Many commercial clients won't even let you bid without proof of this coverage.
Workers' Compensation Insurance is legally required in most states if you have even one employee. Flooring work is physical—your crew is lifting heavy materials, using power tools, working on their knees for hours. When someone gets hurt, workers' comp covers their medical bills and lost wages while protecting you from lawsuits. Expect to pay around $193 per month depending on your payroll and claims history.
Commercial Auto Insurance is mandatory if you're driving company vehicles to job sites. Personal auto policies explicitly exclude business use, so if you get in an accident while hauling flooring materials, your personal insurance won't cover it. Commercial auto protects your vehicles, covers liability if you cause an accident, and handles repairs to other people's property. Average cost runs about $185 per month per vehicle.
Tools and Equipment Coverage protects your flooring nailers, miter saws, grinders, moisture meters, and other specialized equipment. At around $14 per month, it's one of the cheapest policies you'll buy—and one of the most used. Whether your van gets broken into or tools are damaged on site, this coverage replaces them so you're not scrambling to rent equipment mid-job.
Optional Coverage: Add These as Your Business Grows
Once you have the essentials locked down, these coverages protect you from specific risks that become more relevant as you take on bigger jobs, hire more people, or expand your services:
Professional Liability Insurance (also called Errors & Omissions) covers you when clients claim your work was defective or your advice was wrong. Say a homeowner sues because the vinyl planks you recommended show excessive wear from their dog's claws after just six months. Even if you did nothing wrong, defending yourself in court costs thousands. Professional liability pays your legal fees and any settlement. About 80% of flooring installers now carry this coverage, and for good reason—it typically costs $40 to $60 per month and can save your business from a single lawsuit.
Commercial Umbrella Insurance adds extra liability coverage above your general liability and commercial auto limits. If you're working on high-value commercial properties or clients require higher limits (like $2 million or $5 million), an umbrella policy is cheaper than increasing limits on your underlying policies. At around $65 per month, it's a cost-effective way to meet contract requirements and protect your personal assets from catastrophic claims.
Builder's Risk Insurance covers structures and materials during construction or renovation projects. If you're installing flooring as part of a larger renovation and there's a fire or vandalism overnight, builder's risk protects the materials you've stored on site and work in progress. This is typically required by general contractors on commercial projects.
Cyber Insurance is becoming relevant even for flooring contractors. If you store customer credit cards, email invoices with personal information, or use cloud-based scheduling software, you have cyber exposure. A data breach can cost tens of thousands in notification costs, credit monitoring, and legal fees. If you're collecting payments online or storing customer data digitally, add this to your checklist.
When to Add Coverage: Key Business Milestones
Your insurance needs evolve with your business. Here's when to add specific coverages:
Add workers' comp the moment you hire your first employee—even if it's part-time help. Most states impose fines and penalties if you're caught operating without it. Add professional liability when you start advising clients on material selection or design choices, not just installing what they specify. The moment you say "I recommend this product," you're exposed to E&O claims. Add umbrella coverage when you land your first commercial contract requiring higher liability limits or when your revenue exceeds $500,000 annually—your exposure justifies the extra protection.
Consider builder's risk whenever you're part of a multi-phase project lasting more than a few weeks. Add cyber insurance if you're storing customer payment information or if a data breach would shut down your operations. And if you lease a shop or warehouse space, your landlord will require commercial property insurance to cover your inventory and improvements.
Annual Review Checklist: Don't Set It and Forget It
Insurance isn't a one-time purchase. Review your coverage every year—ideally 60 days before renewal—to catch gaps before they bite you. Here's your annual checklist:
Check your revenue and payroll against your policy declarations. If you've grown significantly, your coverage limits might be too low. Verify your employee count is accurate for workers' comp—misreporting can lead to audits and surprise bills. Review your tools and equipment schedule. Have you bought new saws, nailers, or a laser level? Add them to your policy or they won't be covered if stolen.
Pull out recent client contracts and check the insurance requirements. Are you still meeting the minimum coverage limits they specified? Commercial clients increasingly require $2 million aggregate or higher. If you've added services—like subfloor prep, moisture mitigation, or flooring repair—make sure those are covered under your general liability. Confirm your certificate holders list is current. If you're still listing old clients or GCs you no longer work with, clean it up.
Finally, shop your policies. Get quotes from at least two other carriers every few years. Rates vary wildly, and loyalty doesn't always pay in insurance. You might save 20% or more by switching carriers without losing coverage.
Getting Started: Build Your Coverage the Right Way
Start with the essentials—general liability, workers' comp if you have employees, commercial auto, and tools coverage. Get quotes from carriers who specialize in contractor insurance; they understand your risks and often offer better rates than general business insurers. Bundle policies when possible. A Business Owner's Policy (BOP) combines general liability and commercial property coverage at a discount, averaging around $109 per month for flooring contractors.
Once your foundation is solid, add professional liability and umbrella coverage as you take on bigger jobs. Keep your agent updated when your business changes—new employees, bigger contracts, expanded services. The goal isn't to buy every policy available. It's to match your coverage to your actual risks so you're protected without overpaying. Use this checklist annually, adjust as you grow, and you'll build an insurance program that protects your business without breaking your budget.
