Here's something most new flooring contractors learn the hard way: your client's homeowner's policy won't cover the damage when you accidentally crack their marble countertop while moving equipment, or when someone trips over your power cord and breaks their wrist. That's on you. And without general liability insurance, a single mishap could cost you thousands—or worse, put you out of business entirely.
General liability insurance is the foundation of protection for flooring installation businesses. It covers third-party bodily injuries and property damage that happen because of your work—whether you're installing hardwood in a residential kitchen or laying commercial carpet in an office building. More importantly, it's usually the first thing general contractors and property managers ask for before they'll let you on a jobsite.
Why Flooring Installers Need General Liability
Flooring work comes with unique risks that most other trades don't face. You're working in occupied spaces with expensive furniture, dealing with slippery materials and finishes, running power tools near electrical systems, and creating trip hazards with cords, materials, and scrap. Any one of these can lead to an injury or damage claim.
The real exposure comes from completed operations. This is coverage for problems that show up after you've finished the job and left the site. Let's say you install luxury vinyl plank flooring in a basement, but you didn't properly test for moisture. Six months later, the flooring buckles and warps. The homeowner's repair bill is $12,000, and they're coming after you. Your general liability policy—specifically the completed operations portion—handles this claim.
Beyond the financial protection, general liability insurance is a business necessity. Most general contractors require subcontractors to carry at least $1 million per occurrence and $2 million aggregate before they'll sign a contract. Commercial leases often have the same requirement. Without a certificate of insurance, you're locked out of the most profitable jobs.
What General Liability Actually Covers
Your general liability policy protects you from third-party claims—meaning claims from customers, property owners, or anyone else who isn't your employee. Here's what it covers:
Bodily injury happens when someone gets hurt because of your work. A homeowner trips on your saw cord and fractures their ankle. A property manager walks across freshly installed tile that hasn't cured and slips, injuring their back. Your policy pays for their medical bills and, if they sue, your legal defense costs and any settlement or judgment against you.
Property damage covers the cost when you accidentally damage someone else's property. You're moving a heavy box of tile and gouge a client's hardwood staircase. Your flooring nailer misfires and punctures a water pipe behind the drywall, causing flood damage. You're removing old carpet and damage the baseboards. General liability pays for repairs or replacement.
Completed operations, as mentioned earlier, covers claims that arise after you've finished the job. This is critical for flooring work because installation errors often don't show up immediately. Improper subfloor preparation, inadequate adhesive application, or moisture issues can take weeks or months to cause visible damage. Your completed operations coverage extends protection beyond the day you pack up your tools.
The policy also covers your legal defense. Even if a claim is frivolous, defending yourself in court is expensive. General liability pays for your attorney, court costs, and any settlement or judgment up to your policy limits. This alone can save you tens of thousands of dollars.
Understanding Coverage Limits: Occurrence vs. Aggregate
The standard general liability policy for flooring contractors is structured as $1 million per occurrence / $2 million aggregate. If you've never dealt with commercial insurance before, those terms can be confusing. Here's what they mean in plain English.
Per occurrence is the maximum your policy will pay for a single incident. If you cause $800,000 in water damage from a single plumbing accident during a job, your $1 million per occurrence limit covers it. But if the damage totals $1.5 million, you're responsible for the $500,000 difference.
Aggregate is the total amount your policy will pay for all claims during your policy year. Let's say you have three separate incidents over the course of a year: one for $400,000, one for $600,000, and one for $900,000. Each is under your per occurrence limit, but together they total $1.9 million. Your $2 million aggregate covers all three. If you had a fourth claim for $200,000, though, you'd be $100,000 over your aggregate and would pay that out of pocket.
Most general contractors and commercial clients require exactly these limits as a minimum. Some larger projects may require higher limits—$2 million per occurrence or even $5 million. If you're regularly working on high-value commercial projects, consider purchasing umbrella insurance to extend your liability coverage beyond the base policy.
What You'll Actually Pay for Coverage
As of 2026, flooring installers pay an average of $63 per month—about $759 per year—for general liability insurance with the standard $1 million/$2 million limits. That's less than most people spend on their cell phone bill. Some smaller operations with clean claims history can find policies as low as $39 per month or around $500 annually.
Several factors affect your premium. Your claims history is the biggest one—if you've filed multiple claims in the past few years, insurers see you as higher risk and charge accordingly. The size of your operation matters too. A solo installer working residential jobs will pay less than a crew of five doing commercial work. Your annual revenue, the types of flooring you install, and even your location influence the final cost.
Many insurers offer a Business Owner's Policy (BOP) that bundles general liability with commercial property insurance at a discount. The average BOP for flooring businesses costs around $109 per month or $1,304 per year. If you have a physical shop, warehouse, or significant equipment and inventory, a BOP often makes more financial sense than buying separate policies.
Getting Coverage and Certificates
Shopping for general liability insurance is straightforward. Most specialty insurers that focus on contractors can quote you online in minutes. You'll need basic information about your business: your annual revenue, number of employees, types of flooring work you do, and your claims history. Be honest about your revenue and scope of work—underreporting to save on premiums can backfire if you need to file a claim and the insurer discovers the discrepancy.
Once you purchase a policy, you can immediately download a certificate of insurance (COI). This is the document general contractors and clients ask for—proof that you're covered. Most insurers provide same-day certificates, which means you don't have to wait to start bidding on jobs. Keep digital copies handy because you'll be sending these out regularly.
One thing to watch: some contracts require you to name the general contractor or property owner as an "additional insured" on your policy. This extends your liability coverage to protect them if they get sued over your work. Most policies allow this at no extra cost, but make sure your insurer can add additional insureds quickly when needed.
General liability insurance isn't optional if you're serious about running a flooring installation business. It protects you from the financial devastation of a lawsuit, meets the requirements your clients demand, and costs less than a thousand dollars a year for most contractors. The question isn't whether you need it—it's how quickly you can get it in place so you can focus on the work you do best.
