Go to a broker who places brand new companies, because most insurance companies want three years in business first. The good news is that the years you spent doing the same work for someone else count, and there are programs built for first year businesses. Who this is for: owners who just formed a company and need coverage before they can take a job.
The short version
- Many standard insurers require three years in business. That is why online quotes come back empty or high.
- Your experience in the trade counts. Ten years hanging drywall for someone else is a real track record.
- For your first one to three years there are programs built for new companies, plus specialty insurers. Expect a floor on the price.
- Expect to pay more the first year than an established peer, then shop again after your first clean year.
- Get your paperwork ready: entity documents, a resume of your trade experience, and realistic payroll and sales numbers.
Why do insurance companies turn down new businesses?
Insurers price a policy on how likely you are to have a claim. For an established business they read your claims history report. A new business has none, so many standard insurers set a rule: three years in business, or no quote.
This is not a judgment about you. It is a filter, and a broker who writes new companies knows how to get past it.
What counts as history if my company is brand new?
The people who decide whether to quote you look at more than your company's age.
- Your years in the trade. A foreman who ran crews for eight years and just went out on his own is a known quantity. Write it up like a resume and send it with the application.
- Licenses and training. A state contractor license or safety training helps.
- A prior business. If you owned a company before, its claims history counts.
- Realistic numbers. Payroll and sales estimates that match your crew size.
Where does a new business actually get coverage?
| Source | Who it fits | What to expect |
|---|---|---|
| Standard insurer with a new business program | Lower risk trades, owner has trade experience | Normal pricing, sometimes a small new business surcharge |
| Specialty (surplus lines) market | Roofing, demolition, work at height | Higher minimum premium, often payment up front. Adds a state premium tax, plus a stamping fee in states that run a stamping office. In almost every state these policies are not backed by the state guaranty fund if the insurer fails. |
| State workers comp fund or assigned risk plan | Workers comp when no insurer will quote | The state's plan of last resort, either an assigned risk plan or the state fund. It has to take an employer that meets its rules, but it can refuse one that owes a prior insurer premium. Usually the most expensive option. In North Dakota, Ohio, Washington, and Wyoming the fund is the only insurer. In Texas, workers comp is elective for most private employers. |
You cannot apply to the specialty companies yourself. A broker has to do it for you. See markets you cannot reach directly.
What will it cost in the first year?
Illustrative ranges only. Your price depends on trade, payroll, state, and claims history.
| New business | General liability, year one | Same business after 3 clean years |
|---|---|---|
| One person painter, $80,000 sales, no employees | $1,200 to $2,500 | $900 to $1,800 |
| Electrical contractor, 3 employees, $150,000 payroll | $4,000 to $8,000 | $3,000 to $6,000 |
| Roofer, 4 employees, $200,000 payroll | $12,000 to $25,000, often a $5,000 minimum premium | $9,000 to $18,000 |
A minimum premium is the least an insurer will charge, no matter how small your numbers are. Programs for new businesses set it higher than standard insurers do.
Workers comp is different. A new business is priced close to an established one, because you start with no claims history working against you. It has no experience rating multiplier at all until it is big enough to qualify, which is treated the same as a neutral one. The rate is not the same at every insurer: in most states each one files its own multiplier on top of published loss costs, so shopping still matters. Florida, Indiana, North Carolina, Wisconsin, Idaho, Massachusetts, and New Jersey set the rate, so savings there come from credits, dividends, and correct classification. North Dakota, Ohio, Washington, and Wyoming have a state fund as the only insurer, so there is nothing to shop.
How do I get through my first year and then pay less?
- Buy the right coverage, not the cheapest. A policy that excludes the work you do is not a bargain.
- Keep the year clean. No claims, no late payments, no cancellation. A lapse is worse than a high price.
- Keep records. Payroll by employee, subcontractor certificates, signed contracts. Your year end premium audit, the insurer's check of your real payroll and sales, goes better with them.
- Shop at the first renewal. One clean year opens more insurers. See how often to shop around.
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 plumber in New Jersey leaves the company where he worked for eleven years and forms an LLC with one helper. He has a signed subcontract for $60,000 of rough in plumbing starting in three weeks.
What went wrong: Two online quotes come back unable to quote. A third offers general liability at $5,900 with a residential work exclusion, which would exclude the townhouse job itself. The general contractor wants a certificate in ten days.
What it cost: A broker sent one application to a new business program and two specialty markets. The best fit was general liability at about $3,400 and workers comp at about $2,900 for the first year. Illustrative figures for a two person plumbing start up. The broker attached the owner's eleven year work history, which the insurer cited in the quote.
The fix: Your trade experience is your insurance history. Write it up, send it with every application, and use a broker who knows which insurers read it.
Frequently asked questions
Q: How do I find insurance for a new business with no insurance history?
Use a broker who places brand new companies. Many standard insurers want three years in business, so the broker sends your application to new business programs and specialty markets instead, with a summary of your years in the trade.
Q: Will I pay more because my business is new?
Usually somewhat more in the first year, and specialty markets set a higher floor on the price. Prices come down after your first clean year and again after three.
Q: Does my experience as an employee count with insurers?
Yes. Insurers weigh your years doing the same work for someone else. Send a short resume with licenses, training, and the jobs you ran.
Q: Can I get workers comp for a new business?
Yes. A new business has no claims history working against it, so it is priced close to an established one. In most states each insurer files its own multiplier, so it is still worth shopping. If no insurer will quote, the state's plan of last resort takes employers that meet its rules, though it can refuse one that owes a prior insurer premium.
Q: How fast can a new business get insured?
Simple accounts can be set up within a few days. Trades that need specialty markets take one to two weeks, so start before you sign a contract.
Q: Should I just use an online insurer to start?
It can work for very small, low risk businesses. For construction trades, online policies often exclude the work you do. Read the exclusions first.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Getting a brand new contractor insured, with the owner's trade history working for them, is something we do 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.