So you're ready to start your own roofing business. You've got the skills, the tools, and maybe even your first few leads lined up. But here's what stops most new roofing contractors in their tracks: insurance requirements. Without the right coverage from day one, you can't get licensed, you can't land commercial contracts, and you're one accident away from financial disaster.
The good news? Insurance doesn't have to be complicated. This guide breaks down exactly what coverage you need at each stage of building your roofing business, what it'll cost, and how to avoid the expensive mistakes that catch new contractors off guard.
Day One Coverage: What You Need Before Your First Job
Even if you're working solo on residential projects, you need general liability insurance before you climb your first ladder. This isn't optional. General liability protects you if a customer's property gets damaged during a job or if someone gets hurt on a work site. Think a tool falling off a roof and denting a car, or a homeowner tripping over your equipment and breaking an ankle. Without coverage, you're personally liable for those costs.
For roofing contractors in 2025, general liability runs between $150 and $300 per month. That's higher than most other trades because roofing sits at the top of the construction risk pyramid. You're working at heights, handling heavy materials, and dealing with weather exposure. Insurers price that risk accordingly. Expect to pay around $3,200 annually if you're just starting out with minimal revenue and a clean record.
Commercial auto insurance is next. If you're using your personal truck to haul materials and equipment, you need commercial coverage. Your personal auto policy won't cover business use, and trying to file a claim under the wrong policy is a fast way to get denied. Most states require commercial auto the moment you start using a vehicle for business purposes. The only exception is if you're operating exclusively as a pedestrian contractor, which isn't realistic in roofing.
When You Hire Your First Employee: Workers' Compensation Requirements
The day you hire your first helper, workers' compensation insurance becomes mandatory in most states. Some states like New York require it with just one part-time worker. Florida gives you a bit more room, allowing up to four employees before mandating coverage. But don't wait until the state forces your hand. If an employee falls off a roof and you don't have workers' comp, you're looking at devastating financial liability plus potential criminal penalties.
Workers' comp for roofing contractors isn't cheap. It typically costs between $9.90 and $15.25 per $100 of payroll, depending on your state. Maine offers the lowest monthly rates at around $726, while New York reaches $970 per month. That's because roofing carries one of the highest risk classifications in construction. Your workers are exposed to falls, weather hazards, and equipment injuries daily. The insurance reflects that reality.
Here's what surprises most new contractors: workers' comp often equals 20-50% of your total payroll costs. If you're paying an employee $40,000 annually, budget $4,000 to $6,000 for their workers' comp premium. Factor this into your pricing from the start, or you'll find yourself underwater on every job.
Growth Stage Coverage: What to Add as You Scale
Once you start bidding on commercial projects, you'll hit new insurance requirements fast. Large commercial clients typically require liability coverage beyond the standard $2 million limit. Government buildings, schools, and hospitals commonly demand surety bonds before you can even submit a bid. Performance bonds guarantee you'll complete the job as agreed, protecting clients from financial losses if you default.
Professional liability insurance becomes critical when you're designing roofing systems or consulting on material selection. This coverage, also called errors and omissions insurance, protects you if a client claims your professional advice caused them financial harm. If you recommend a roofing system that fails prematurely due to a design flaw, professional liability covers your legal defense and potential settlement costs.
Tools and equipment coverage protects your gear against theft and damage wherever you keep it. As your inventory grows from a few basic tools to thousands of dollars in specialized equipment, this coverage becomes essential. Most general liability policies don't adequately cover your tools, creating a dangerous gap if your truck gets broken into or equipment gets stolen from a job site.
Common Mistakes That Cost New Roofing Contractors Thousands
The biggest mistake new contractors make is assuming they're covered by a general contractor's insurance when working as a subcontractor. That's rarely true. If you're a roofing sub and someone gets hurt on your watch, the GC's policy probably won't protect you. You need your own coverage, period.
Another costly error is letting coverage lapse between policies. Any gap, even a single day, leaves you completely exposed to liability. If an incident occurs during that gap, you have no protection. Insurance companies know this and will deny claims that fall into coverage gaps, even if you had valid policies before and after.
Many contractors also fail to document incidents properly. When something goes wrong on a job, incomplete or inaccurate documentation is one of the most common reasons claims get delayed or denied. Take photos, collect witness statements, and file incident reports immediately. Your insurance company needs clear evidence to process claims efficiently.
Not understanding your policy terms is another trap. Many contractors discover coverage limitations and exclusions only after filing a claim. Read your policy carefully, ask questions about anything unclear, and make sure you understand exactly what's covered and what's not.
How to Save Money on Insurance Without Cutting Corners
Bundling policies is the fastest way to reduce costs. Combining general liability, workers' comp, and tools coverage typically saves 15-25%. If you add commercial auto to the bundle, you can save 20-28% compared to purchasing each policy separately. Most insurers offer business owner's policies (BOPs) that package multiple coverages at a discount.
Maintaining a clean claims history directly impacts your premiums. Every claim you file increases your rates for years. Focus on safety training, proper equipment maintenance, and job site protocols that prevent incidents. The money you save on premiums by avoiding claims far exceeds what you might recover from small claims.
Shopping your insurance annually also helps. Rates and available discounts change constantly. What was the best deal last year might not be competitive this year. Get quotes from at least three insurers who specialize in contractor coverage, and compare not just price but coverage limits and exclusions.
Getting Started: Your First Steps
Before you quote your first roofing job, get general liability insurance in place. Most states won't issue a roofing license without proof of coverage. Contact insurers who specialize in contractor policies, they understand the unique risks of roofing and can structure coverage that actually protects you.
Budget realistically for insurance from day one. A small roofing startup should expect to pay $6,000 to $12,000 annually for basic coverage. As you add employees and grow revenue, that number climbs to $15,000 to $20,000 or more. Factor these costs into your pricing structure so you're not operating at a loss.
Starting a roofing business means accepting serious risk. The right insurance doesn't eliminate that risk, but it prevents one bad day from destroying everything you've built. Get covered properly from the start, understand what triggers require additional coverage as you grow, and avoid the common mistakes that leave contractors exposed. Your business depends on it.
