The annual policy is cheaper for most contractors. One yearly premium covers every job you do, while a project policy costs about $2,500 or more for one job. The project policy wins only when you expect one large or unusual job and nothing like it for a year. Who this is for: contractors deciding whether to buy pollution coverage for one contract or for the business.
The short version
- An annual policy covers every job you do that year. A project policy covers one job only.
- Illustrative pricing: $1,500 to $7,500 a year for a small trade at a $1,000,000 limit, versus $2,500 and up as one premium for a project.
- If you will see this requirement two or more times in a year, the annual policy almost always wins.
- A project policy makes sense for one very large or unusual job, or when the owner wants a limit far above your normal program.
- You can do both: an annual policy for everyday work and a project policy for the one big job.
What is the difference between a project policy and an annual policy?
Both are contractors pollution liability: coverage for fumes, dust, spills, or mold caused by your work. Both fill the hole left by the pollution exclusion in your general liability policy.
| Annual policy | Project policy | |
|---|---|---|
| What it covers | Every job you and your subs do during the policy year | One named job at one address |
| How long it lasts | One year, then it renews | The length of the job, plus a set number of years after the work is done |
| Limits | Shared across all your jobs for the year | Dedicated to that one job |
| Illustrative cost | $1,500 to $7,500 a year for a small trade at $1,000,000 | $2,500 and up as one premium covering the job and the years after it. Market minimums often start higher, near $5,000, when the policy runs for years after the job. |
| Next time a contract asks | You already have it, send a certificate | Start over with a new application |
When is the annual policy cheaper?
Almost any time you will see the requirement more than once. The figures below are illustrative.
| Jobs that need pollution coverage this year | Project policies | One annual policy |
|---|---|---|
| 1 job | $2,500 to $4,000 | $1,500 to $7,500 |
| 2 jobs | $5,000 to $8,000 | $1,500 to $7,500 |
| 3 jobs | $7,500 to $12,000 | $1,500 to $7,500 |
The project column is one premium per job, not a yearly cost, and it covers that job for years afterward. At two jobs the annual policy is usually ahead, but compare your own two quotes, not the ranges. A trade quoted at the low end of the annual range is ahead at the first job. A trade at the high end may not pull ahead until the third. Ask for both prices on the same application. The annual policy also covers the jobs that did not ask for it.
When does a project policy make sense?
- One big or unusual job. A single contract at a former gas station or a hospital, with nothing like it in your normal year.
- A limit far above your normal program. If you carry $1,000,000 and one owner wants $5,000,000, a project policy can be cheaper than raising your whole program.
- The owner wants dedicated limits. Some owners do not want to share your yearly limit with your other customers.
- Coverage that runs for years after the job. Project policies keep covering that job well past completion.
Many busy contractors carry both. Tell your broker about each one so the two policies work together. Sitework contractors face this choice most often. See what pollution coverage excavation and sitework need.
What else changes besides the price?
Three things owners miss when they compare only the price.
- Shared limits. On an annual policy, a large claim on one job uses up limit your other jobs share for the rest of the year.
- Coverage after the job ends. Most pollution policies for trades are occurrence policies, which cover what happens while the policy is active even if the claim arrives years later. That keeps working after you cancel. The other kind, called claims-made, pays only for claims reported while the policy is active, so it stops the day you cancel unless you pay for extra reporting time. A project policy adds a set number of years after the job when claims from that job are still covered. Ask which form you are quoted.
- Minimum premiums. Most specialty insurance companies will not write a project policy below a set minimum, often $2,500 or more. A small job cannot get a small policy.
How do I get either one quoted?
Both come from specialty insurance companies through a broker, not online. Send the insurance section of the contract, a description of your work, your revenue, and your claims history report. For a project policy, add the job address, contract value, and schedule. Expect 2 to 10 business days. See also where to get pollution insurance and how to find cheaper pollution coverage.
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 demolition contractor in New York does eight to ten interior demolition jobs a year. In one year, two general contractors ask for $1,000,000 of contractors pollution liability. He does not carry it.
What went wrong: He buys a project policy for each job, an illustrative $3,200 for the first and $4,100 for the second. That is $7,300 for two jobs, and the other eight jobs have no pollution coverage at all.
What it cost: An annual policy for his firm was quoted at an illustrative $6,200. It would have covered all ten jobs, cost $1,100 less, and saved him two applications.
The fix: If pollution coverage shows up in your contracts more than once a year, stop buying it one job at a time. Price the annual policy first, then use project policies only for the rare job that is too big for it.
Frequently asked questions
Q: Is it cheaper to buy pollution insurance for one project or the whole year?
For most contractors the annual policy is cheaper. One premium covers every job for the year, while a project policy costs about $2,500 or more for a single job. Buy a project policy only for one large or unusual job.
Q: Does an annual pollution policy cover jobs that did not require it?
Yes. It covers the work you and your subs do during the policy year, whether or not a contract asked for it. Pollution claims often come from ordinary jobs.
Q: What happens to a project policy when the job is finished?
Ask for a completed operations extension in writing, which is a set number of years after the work is done when claims from that job are still covered. It is priced into the policy, not automatic. Three to five years is common, and public owners sometimes ask for ten. Check the number before you sign.
Q: Can I add one big job to my annual policy instead?
Sometimes. Your insurer may raise the limit for one job or for the year for an added premium. Ask your broker to price that next to a project policy.
Q: Do I need to give up my annual policy if I buy a project policy?
No. Many contractors carry both. The annual policy handles everyday work and the project policy handles the one job with a very high requirement.
Q: Does a project policy cover my other jobs while it is running?
No. It covers the one named job at one address. Work you do elsewhere that year has no pollution coverage unless you also carry an annual policy.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Pricing a project pollution policy next to an annual one, from the same specialty markets, is a comparison we run for contractors whenever a big contract lands.
- 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.