Usually less than contractors expect. If you already carry general liability, workers comp, and auto, the extra wording a contract asks for costs anywhere from nothing to a few hundred dollars. Add roughly $600 to $4,500 a year if the contract also wants an umbrella. Every number here is illustrative: your price depends on which lines you are missing, your trade, payroll, state, and claims history. Who this is for: contractors who want a real number before they sign or bid.
The short version
- If you already have the main policies, the extra wording is often free or under a few hundred dollars.
- An umbrella is the biggest add. Roughly $600 to $2,500 a year for $1,000,000, and more for higher limits and riskier trades.
- The workers comp add-ons (a higher limit for the part that pays if an employee sues you, or a waiver for your customer) usually cost less than owners fear.
- Your trade, payroll, state, and claims history set the price. The size of the contract mostly does not.
- Get the number before you sign, and put it in your price.
What does each requirement usually cost?
Illustrative ranges for a small contractor with a clean claims history. They are a starting point for a conversation with your broker, not a quote.
| What the contract asks for | What it means | Illustrative cost |
|---|---|---|
| Additional insured | Your customer can use your liability policy if they are sued because of your work | Often free if your policy has blanket wording, which adds the party you signed a written contract with. Not every policy has it, and it usually does not reach an owner or lender you did not sign with, so extra names can cost roughly $50 to $300 each. |
| Additional insured, completed operations | That protection keeps going after the job is finished | Often free with blanket wording. Otherwise roughly $100 to $500, and some insurers will not offer it to certain trades. |
| Primary and noncontributory | Your policy pays first and your customer's policy does not chip in | Usually free to roughly $150. It is normally its own endorsement, so check the form list rather than assuming it rides along. |
| Waiver of subrogation, general liability | Your insurer agrees not to go after your customer to recover money it paid | Often free with blanket wording. Otherwise roughly $50 to $250. |
| Waiver of subrogation, workers comp | The same promise from your workers comp insurer | Usually 2% to 5% of the workers comp premium tied to that job, with a state minimum. A few states use their own form or limit when a waiver can be given, so confirm it is available before you promise it. |
| Per project aggregate | Your yearly general liability limit resets for each job | Free on some policies, roughly $250 to $1,000 on others. |
| Employers liability raised to $1,000,000 | The part of workers comp that pays if an employee sues you | Roughly $100 to $400 a year for a small payroll. |
| $1,000,000 umbrella | A second layer of coverage above your other liability policies | Roughly $600 to $2,500 a year. Roughly $1,200 to $4,500 for $2,000,000 and $3,000 to $12,000 for $5,000,000, and fewer insurers offer the top limit to small contractors. Roofing, demolition, and work at height cost more. |
| Contractors pollution liability | Coverage for fumes, dust, spills, or mold caused by your work | Roughly $1,500 to $5,000 a year for $1,000,000. |
See also what it costs to add an additional insured and whether a waiver of subrogation costs extra.
Does the size of the contract change the price?
Mostly no. Endorsements and umbrellas are priced on your whole business for the year, not on one job. A $40,000 contract and a $400,000 contract that ask for the same wording cost you the same to meet. The size of the job matters in one way: it tells you whether the requirement is reasonable. A $5,000,000 umbrella on a $30,000 job is a template mistake, and you can ask the customer to change it.
What makes my price higher or lower?
- Your trade. A painter and a roofer with the same payroll pay very different umbrella prices.
- Your payroll and sales. Most contractor policies are priced on them, so a bigger crew means a bigger premium for the same limit.
- Your state. Some states cost two or three times what others do for the same coverage.
- Your claims history. One large claim in the last five years can double an umbrella quote.
- What you already carry. An umbrella insurer usually wants $1,000,000 on your general liability and auto underneath it, and either $500,000 or $1,000,000 on employers liability. Raising yours is part of the cost.
How do I put this into my price?
- Send the insurance section to your broker and ask for a cost per line.
- Separate one time costs (extra wording) from yearly costs (umbrella, higher limits).
- Spread yearly costs across the jobs you expect to use them on. If you take three jobs a year that need an umbrella, each carries a third.
- Add the result to your overhead line, not as a visible "insurance fee" the customer will argue about.
For why umbrellas in particular can get expensive, read why commercial umbrella insurance is so expensive for contractors.
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 tile contractor in Florida with five employees is offered a $75,000 contract on a hotel renovation. The insurance exhibit asks for additional insured wording that continues after completion, a waiver on workers comp, and a $1,000,000 umbrella he does not carry.
What went wrong: He guessed the total at $8,000 and drafted an email turning the job down.
What it cost: His broker priced it the same afternoon. Illustrative: roughly $300 for the completed operations wording, roughly $250 for the workers comp waiver, and roughly $1,400 for the umbrella. About $1,950, or 2.6% of the contract, and the umbrella would cover his next hotel job too.
The fix: Never turn down a job on a guess. The real number was a quarter of what he feared, and it fit inside his markup.
Frequently asked questions
Q: How much will meeting this contract's insurance requirements cost?
If you already carry the main policies, the extra wording is often free to a few hundred dollars. An umbrella adds roughly $600 to $2,500 a year for $1,000,000. Your trade, payroll, state, and claims history set the real number.
Q: Is adding my customer to my policy free?
Often yes, if your policy has blanket wording, which adds the party you signed a written contract with. It usually does not reach an owner or lender you did not sign with, and if your insurer charges per name, expect roughly $50 to $300 each.
Q: How much does an umbrella cost for a small contractor?
Illustrative: roughly $600 to $2,500 a year for $1,000,000, $1,200 to $4,500 for $2,000,000, and $3,000 to $12,000 for $5,000,000. Roofing, demolition, and work at height sit at the top of each range.
Q: Does a waiver on my workers comp cost money?
Usually a small percentage, often 2% to 5%, of the workers comp premium tied to that job, with a minimum set by your state and insurer. A blanket version covering every customer is often the better deal.
Q: Can I pass the cost on to my customer?
Yes, by building it into your price. Put it in overhead rather than as a separate insurance line item. Most general contractors expect subs to carry these costs and price accordingly.
Q: What if the cost is more than the job is worth?
Ask your customer for a specific alternative before you walk away, such as a lower umbrella limit tied to the contract size. Requirements copied from templates for large companies get adjusted more often than you would think.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Putting a real dollar figure next to every line of a contract's insurance section, before you sign or bid, is what we do first for every contractor who sends us a contract.
- 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.