Guide
Here's the full annual stack with real dollar ranges, plus how to turn that total into a per-hour number you build into your rate — and a rule for deciding when a job's certificate-of-insurance demands aren't worth it.
Ask five one-man operations what they pay and you'll get five different numbers. Trade, state, claims history, revenue and vehicle age all move the price. But the policies themselves are predictable. Almost every solo contractor who works on other people's property ends up carrying some combination of five things. Below are realistic annual ranges for each, based on typical small-business quotes in the US market. Treat them as planning numbers, not quotes — get your own from a broker who covers your trade.
| Policy | Typical annual cost | What it's for |
|---|---|---|
| General liability | $500 – $1,500 | Property damage or injury you cause on a job |
| Workers' comp "ghost policy" | $700 – $1,400 | Satisfies GC/state requirements when you have no employees |
| Commercial auto | $1,400 – $2,600 | Work vehicle, tools inside it, liability on the road |
| Tools & equipment floater | $150 – $400 | Theft or damage to gear away from a fixed premises |
| Additional-insured endorsements | $25 – $75 per endorsement | Adds a client or GC to your GL policy per their contract |
Stack the midpoints and a typical solo contractor is paying somewhere between $2,775 and $5,975 a year, before endorsements. Add three or four endorsements across the year and you're looking at $2,900–$6,300. Where you land depends heavily on trade risk (roofing and tree work sit at the top, handyman and cleaning nearer the bottom) and on whether you're renting a vehicle-mounted lift or ladder rack that pushes the auto and floater numbers up.
If you have no employees, you don't strictly need workers' comp for yourself in most states. But general contractors and property managers routinely require a workers' comp certificate before they'll let you on a job. A "ghost policy" is comp coverage written for a business with zero payroll — it exists purely to produce that certificate. It's cheaper than real comp because there's no payroll to insure, but it's not free: budget $700–$1,400 depending on your trade classification code and state.
A yearly total sitting in a spreadsheet doesn't help you price a job. What helps is converting it to a cost per billable hour, the same way you'd handle any fixed overhead. The formula is simple:
Annual insurance premium ÷ billable hours per year = insurance cost per hour
Most solo contractors, once you strip out travel, admin, quoting, callbacks and downtime, land around 1,150 billable hours a year (roughly 22 hours a week, 52 weeks). At that figure:
So the working range is $2.50–$5.50 per billable hour that insurance alone has to be baked into your rate. If your rate doesn't already include this, you're covering it out of profit — or not covering it at all, which means it's coming out of your own pay at year end.
If you haven't built your hourly rate up from overhead in this way, the hourly rate calculator walks through the full build, insurance included, alongside vehicle costs, tools and your own target income.
Take an electrician running one van, no employees, based in a mid-cost state.
He also does about six jobs a year for GCs that require an additional-insured endorsement, at $50 each: another $300/yr. Total annual insurance spend: $4,680.
At 1,150 billable hours: $4,680 ÷ 1,150 = $4.07/hr. That figure needs to sit inside his quoted rate on every job, not just the ones that ask for a certificate. If his rate is $85/hr, roughly 5% of every billable hour is going straight to insurance before he's covered fuel, tools depreciation or profit.
Not every job that demands a certificate of insurance is worth taking. Some GCs and property managers ask for a full additional-insured endorsement, higher liability limits, or even a waiver of subrogation, for a small job. Before you say yes, run this check:
Job value must cover: endorsement cost + pro-rata share of your annual premium for the hours the job takes.
Worked out: a 4-hour job at the electrician's $4.07/hr insurance cost carries $16.28 of pro-rata premium, plus a $50 endorsement if the GC needs one added. That's $66.28 the job needs to clear before insurance is even paid for — separate from labour, materials and profit. If the job is only worth $200 and involves an hour of extra paperwork to get the endorsement issued, the maths gets thin fast.
The rule is simple: if a job's total value can't absorb the endorsement fee plus its pro-rata premium share and still leave your normal margin, it's not worth the certificate hassle. This matters most for small repeat jobs from GCs who ask for paperwork on every ticket regardless of size.
Insurance is one line in your overall break-even number — the revenue you need before you're actually making money, once every fixed cost (insurance, vehicle, phone, software, tools) is covered. If you haven't calculated that number, the break-even calculator pulls all your fixed and variable costs together, insurance included, into one figure.
And for the COI-gated job decision specifically, run the actual numbers through the job profitability calculator before you quote — it'll show you, job by job, whether the endorsement and pro-rata premium leave enough margin to bother.
A solo contractor's insurance stack typically runs $2,775–$5,975 a year in premiums, plus $25–$75 per endorsement for jobs that need one. Converted to a per-hour basis at 1,150 billable hours, that's $2.50–$5.50 an hour that has to already be inside your rate — not something you add on when a client happens to ask for a certificate. Price it in up front, and treat every COI request as a quick maths check, not just paperwork.
The Small Business Operations Kit ($19) turns guides like this one into fill-in-once worksheets: rate card, quoting sheet, job costing, payment terms and follow-up templates.