Guide
If you're renewing this fall or bidding on your first commercial job, here's what a $1M/$2M policy really costs by trade, and where owners typically overpay or underinsure.
Renewal notices for general liability policies tend to land in a batch every fall, right as commercial clients start asking for a certificate of insurance (COI) before they'll sign a contract. If you've never priced this out carefully, or you're about to add a service line, the numbers below are the ranges brokers are actually quoting in 2026.
General liability (GL) pays out if your work damages someone's property or causes bodily injury — a cracked tile floor from a dropped water heater, a client tripping over your extension cord, a nail through a water line. It does not cover your own tools, your vehicle, or your employees' injuries — those are separate policies (inland marine, commercial auto, workers' comp).
Rule of thumb: if a mistake on the job could hurt a person or damage property that isn't yours, that's a GL claim. If it's your own equipment or crew, it isn't.
For a standard $1M per-occurrence / $2M aggregate policy — the combination most commercial contracts require — typical annual premiums run:
Revenue matters more than most owners expect — insurers typically price GL at 1-5% of annual revenue for smaller operations, with most trades falling in the 1.5-3.5% band. So a $150,000/year handyman business and a $400,000/year one carrying identical coverage will not see identical quotes, even in the same state.
Where you're based matters too. California and New York consistently price highest due to litigation costs and regulatory overhead; states like Arizona, Georgia, and Ohio tend to run lower for the same coverage.
Your state license may only require $50,000-$100,000 in coverage — that's the legal floor, not the practical one. The moment you want to work under a general contractor, take on a property-management account, or bid a commercial job, the client's contract will almost always specify a $1M per-occurrence / $2M aggregate minimum before they'll even look at your quote. That's why the large majority of small trade businesses carry that exact combination: it's the ticket to the work, not padding.
If you only ever work directly for homeowners and never sign a contract requiring a specific limit, a lower tier can be defensible — but one bad claim on a $100,000 limit can wipe out the business. Most brokers will tell you the jump from $500K to $1M/$2M costs far less than the coverage gap it closes.
Insurers underwrite your policy against the exact tasks listed on it. If you started as a painter and quietly picked up small electrical and plumbing jobs over the past year — the kind of work that's easy to say yes to when a customer asks — none of that may be covered. Worse, if a claim comes in on work outside your declared scope, the insurer can deny it entirely.
Before you advertise a new service (on your site, Google Business Profile, or even just verbally to repeat customers), call your broker and get it added. It's a five-minute conversation that's much cheaper than a denied claim.
Insurance is overhead — it needs to be baked into your hourly rate or job pricing, not absorbed out of margin. A simple way to check the math: take your total annual overhead (insurance, vehicle, tools, admin time) and divide by your billable hours for the year to see what you actually need to charge just to break even before profit. The hourly rate calculator walks through that math directly, and the job profitability calculator is useful for checking whether a specific job's price still covers its share of overhead once materials and labor are accounted for.
If your premium jumped at renewal — which is common in 2026 given tighter underwriting industry-wide — that's a signal to revisit your rates, not just absorb the increase quietly for a year.
Commercial and property-management clients routinely ask for a fresh certificate of insurance before every job, sometimes before every renewal period on an ongoing contract. Chasing your broker for COIs, emailing them to clients, and re-sending them when a client's system "didn't receive it" is exactly the kind of repetitive admin that eats an afternoon a month without generating a single new job. If that kind of back-and-forth — COI requests, quote follow-ups, missed-call callbacks — is piling up faster than you can clear it, that's the specific gap our done-for-you admin service is built to close.
If you'd rather handle it yourself, the Operations Kit ($19) includes a basic COI request/tracking template you can adapt.
Typically $60-$220 a month, or roughly $700-$2,600 a year, for a $1M/$2M policy — the range depends on trade classification, annual revenue, claims history, and state. A handyman who sticks to painting and light carpentry usually lands near the bottom; add plumbing, electrical, or roofing to the same policy and the premium can run 30-50% higher.
Most general contractors, property managers, and commercial clients require at least $1M per occurrence and $2M aggregate before they'll hire you, even though state licensing boards often only require $50,000-$100,000. Around 92% of small trade businesses carry the $1M/$2M combo for this reason — it's the de facto minimum for commercial and subcontractor work, not a luxury tier.
Yes. Insurers price your policy against the specific tasks listed on it, not your trade title as a whole. Add light electrical or plumbing to a handyman policy and your rate can jump 30-50%, because you're now underwritten for higher-severity claims. Call your broker before you advertise a new service so a claim on that work is actually covered.