If you're running a home remodeling business, here's something that should get your attention: statistics show there's a 40% likelihood you'll face a property damage or liability claim within the next decade. That's not meant to scare you—it's just the reality of working in people's homes with power tools, ladders, and heavy materials. One misstep, one accidental scratch on a hardwood floor, or one trip-and-fall incident can turn into a lawsuit that threatens everything you've built.
That's where general liability insurance comes in. It's not just another business expense to grumble about—it's the financial safety net that lets you sleep at night and the credential that gets you hired in the first place. Most clients won't even let you through the door without a certificate of insurance in hand.
What General Liability Insurance Actually Covers
Think of general liability as your shield against the "oops" moments that happen on the job. It covers third-party bodily injury and property damage—meaning injuries or damage to people who aren't your employees and property that doesn't belong to you.
Here's what that looks like in real life: You're remodeling a kitchen, and your crew accidentally knocks over a vintage lamp in the living room. General liability covers the replacement. A homeowner trips over your extension cord and breaks their ankle. General liability covers their medical bills and legal defense if they sue. You're demoing a wall and accidentally crack a water pipe, flooding the basement. General liability steps in to cover the water damage to the client's property.
The policy also includes advertising injury coverage, which protects you if someone claims you violated their copyright in your marketing materials or slandered a competitor. It's not the main reason you buy the policy, but it's a nice safety feature to have.
Understanding Coverage Limits: Per Occurrence vs. Aggregate
When you're shopping for general liability insurance, you'll see limits written like this: $1 million / $2 million. Here's what those numbers mean and why they matter.
The first number—$1 million—is your per occurrence limit. That's the maximum your insurance will pay for a single incident. If a homeowner sues you for $500,000 after your work causes structural damage, you're covered. If they sue for $1.5 million, you're on the hook for the extra $500,000.
The second number—$2 million—is your aggregate limit. That's the total your insurance will pay across all claims during your policy year (usually 12 months). Once you hit that $2 million cap, you're uninsured until your policy renews. Over 90% of small business owners choose the standard $1 million per occurrence / $2 million aggregate coverage, and it's what most contracts require as a minimum.
But here's where it gets interesting for remodeling contractors: the per-project aggregate endorsement. Standard policies apply that $2 million aggregate across all your work for the year. But what if you're working on five different high-value homes at once? With a per-project aggregate, you get the full $2 million limit for each individual project. It costs a bit more, but it's worth every penny if you're juggling multiple jobs.
Why Home Remodeling Businesses Can't Skip This Coverage
Let's be honest: remodeling work is risky. You're working in occupied homes, often with limited space, demolishing old structures, and installing new ones. The potential for things to go wrong is baked into the job. And when things do go wrong, the costs add up fast. The average liability claim costs nearly $30,000, and that doesn't include your legal defense fees.
Beyond the financial protection, general liability insurance is basically your ticket to do business. Most general contractors won't hire you as a subcontractor without proof of coverage. Homeowners are increasingly savvy and won't hire unlicensed, uninsured contractors. Many states require general liability coverage before they'll issue you a contractor's license. And if you ever want to bid on commercial remodeling projects, you'll need to show certificates of insurance proving you carry adequate limits.
Here's something else to consider: remodeling contractors have some of the longest exclusion lists in the insurance industry. That's because insurers have seen significant claims from remodelers over the years. The risks are real, the claims are expensive, and going without coverage is gambling with your business and personal assets.
What You'll Pay for General Liability Coverage
Good news: general liability insurance for home remodeling contractors is more affordable than you might think. The average remodeling contractor pays between $81 and $97 per month, or roughly $1,000 to $1,200 per year, for standard coverage. That's less than the cost of a few lattes per week—not a bad price for protecting your entire livelihood.
Your actual premium depends on several factors. If you're doing structural work, electrical, or plumbing as part of your remodels, you'll pay more than someone who focuses on cosmetic updates like painting and flooring. Solo remodelers typically pay less than larger firms with multiple crews. Urban areas with higher lawsuit rates will see higher premiums. And your claims history matters—a clean record keeps your costs down, while past claims can bump up your rates.
Keep in mind that rates have been trending upward. Premium rates for general liability coverage increased between 5% and 15% in 2025, driven by inflation and higher claim costs. But even with these increases, the cost is manageable for most businesses—and far less expensive than paying for a single claim out of pocket.
Getting Started: What You Need to Know
Shopping for general liability insurance is straightforward. Most small businesses can get covered within 24 hours of applying for quotes. You'll need some basic information: your business structure, annual revenue, number of employees, types of work you perform, and your claims history.
Start with the standard $1 million per occurrence / $2 million aggregate limits—that's what most contracts require and what over 90% of contractors carry. If you work on high-value properties or multiple simultaneous projects, ask about the per-project aggregate endorsement. And if your contracts require higher limits (some large commercial projects demand $2 million or more), you can increase your primary limits or add an umbrella policy on top.
Once you have coverage in place, you can download a certificate of insurance whenever you need it. Keep digital and physical copies handy—you'll be asked for them regularly. And remember: general liability is just one piece of your insurance puzzle. You'll also need workers' compensation if you have employees, commercial auto insurance for your work vehicles, and potentially inland marine coverage for your tools and equipment.
The bottom line? General liability insurance isn't optional for home remodeling contractors—it's foundational. It protects you from financial ruin, opens doors to better clients and bigger projects, and gives you the peace of mind to focus on what you do best: transforming houses into homes. Don't wait until you need it to get covered. The best time to buy general liability insurance was before you started your first project. The second best time is right now.
