Put both quotes side by side and compare coverage before you compare price. Nine things decide which one is really cheaper, and the table below lists all nine. The cheaper quote is usually cheaper because something is missing or smaller. Who this is for: an owner holding two quotes with different prices and no easy way to tell which is the better deal.
The short version
- Price is the last thing to compare, not the first.
- Check the payroll or sales each quote was priced on. If they differ, the prices are not comparable.
- Look for exclusions that hit your real work: homes, height, subcontractors, past jobs.
- Confirm each quote has the wording your contract needs, not just the limits.
- A specialty quote adds tax and often a minimum you owe if you cancel. Compare the total.
What should I compare first?
Compare coverage before price. Start with the limits: the most the policy pays for one incident, the most it pays in a whole policy year, and the separate limit for claims that show up after a job is finished. Then the deductible, the part of a claim you pay first.
Next, check what number each quote was priced on. Most contractor policies are priced on your payroll or your sales. If one used $400,000 of payroll and the other used $300,000, the second is not cheaper. It is priced on a smaller business, and the year end payroll check will bill you the difference.
What does a side by side comparison look like?
Below is an illustrative comparison for a small remodeling contractor. The figures show the method.
| What to compare | Quote A ($6,400) | Quote B ($4,900) | Why it matters |
|---|---|---|---|
| Limit per incident and per year | $1,000,000 / $2,000,000 | $1,000,000 / $2,000,000 | Same. Both meet a typical contract. |
| Limit for finished work | $2,000,000 | $1,000,000 | Most construction claims show up after the job is done. B pays half for those. |
| Deductible | $1,000 | $5,000 | B costs you $4,000 more on the first claim. |
| Payroll used to price it | $380,000 | $300,000 | B is priced on a smaller business. Expect a bill at audit. |
| Exclusions | None for your work | No coverage above two stories, no coverage for damage caused by subcontractors | B's exclusions cut out part of your actual work. |
| Wording your contract needs | Blanket wording for the customer you sign with, a separate add on for work after it is finished, separate primary wording, and a waiver | Customer covered for ongoing work only, waiver costs $250 extra | B fails a certificate check on most contracts. Ask for the policy pages either way: what is typed on a certificate is a claim, not proof. |
| Type of insurer | Standard, state licensed (admitted) | Specialty, not licensed in your state (surplus lines) | B adds state tax, and in nearly every state no guaranty fund stands behind it. |
| Financial rating | A | A- | Most contracts ask for A- VII or better, and both pass. Public work usually also asks for an insurer licensed in the state, which B is not. Check both tests before you buy B. |
| Minimum you owe if you cancel, plus fees | None | 25 percent minimum, $150 policy fee, $220 state tax | B's true price is about $5,270, and you owe $1,225 if you cancel on day one. |
Quote B looks $1,500 cheaper. After tax and fees it is about $1,100 cheaper, with a $4,000 higher deductible, half the limit for finished work, two exclusions that hit your real jobs, and wording that fails a certificate check.
Which exclusions should I look for on a contractor quote?
- Residential. No coverage for work on homes, condos, or apartments.
- Height. No coverage above a set number of stories or feet.
- Subcontractor. No coverage for damage caused by subs you hire.
- New York Labor Law. On a New York quote, look for wording that takes out the injury lawsuits state law lets workers bring. Without it the policy is close to useless on a New York job site, so ask before you buy.
- Pollution. Most liability policies exclude fumes, dust, spills, and mold. Check whether either quote adds it back.
- Prior work. No coverage for jobs finished before the start date.
How do I check the wording my contract needs?
Pull out the insurance section of your contract and tick each item off on both quotes:
- Your customer can use your liability policy if they get sued over your work.
- That protection keeps going after the job is finished.
- Your policy pays first and your customer's does not chip in.
- Your insurer agrees not to go after your customer to recover money it paid.
- Your yearly limit resets for each job, if the contract asks for that.
If a quote misses an item, ask what it costs to add. See what a construction contract usually asks for.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A painting contractor in New Jersey with four employees gets two general liability quotes: $5,800 from his current insurer and $4,100 from one found online.
What went wrong: He picks the $4,100 quote. Six weeks later his general contractor rejects his certificate: the new policy lets his customer use his insurance only while work is in progress, not after the job is finished. At year end, the audit finds it was priced on $180,000 of payroll instead of his real $260,000.
What it cost: The audit bill is about $1,300. Adding the finished work wording part way through costs $400. Two idle days while the certificate is fixed cost about $1,600 in crew time. His $4,100 policy costs about $7,400 in year one. Illustrative figures.
The fix: Ten minutes side by side would have shown the cheap quote was priced on the wrong payroll and missing the wording his contract required.
Frequently asked questions
Q: How do I compare two business insurance quotes that look different?
Put them in one table and compare limits, deductible, the payroll or sales used, exclusions, contract wording, type of insurer, financial rating, cancellation minimums, and fees. Then compare price. The cheaper quote is usually cheaper for a reason on that list.
Q: Why is one quote so much cheaper than the other for the same business?
Most often because it was priced on lower payroll or sales, carries a higher deductible, or leaves out part of your work. Sometimes it is a specialty quote whose tax and fees are not in the headline price.
Q: What if the two quotes used different payroll numbers?
Then the prices are not comparable. Ask both insurers to requote on the same payroll. Your real payroll is what you will pay for at audit anyway.
Q: Is a quote from a specialty insurer worse than one from a standard insurer?
Not worse, just different. A standard insurer comes with your state's guaranty fund behind it, which pays covered claims up to a state cap if the insurer fails, and larger businesses can be left out. In nearly every state that fund does not cover a specialty insurer at all. A specialty quote also carries state tax and usually a minimum you owe if you cancel, so compare totals. See standard versus specialty insurers and minimum earned premium.
Q: Can a broker compare the quotes for me?
Yes. A broker will lay both out side by side, mark every difference, and tell you which ones matter for your contracts, even if one quote came from somewhere else.
Q: Should I ever pick the more expensive quote?
Often, yes. If it has the higher limit for finished work, the lower deductible, and the wording your contract needs, it can be cheaper over a year with one claim or one rejected certificate.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Laying two quotes side by side and marking every difference that matters is something we do for contractors every week.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.