What insurance is required for South Dakota contractor licensing?

South Dakota contractors need general liability insurance with minimum coverage of $200,000 per occurrence. Most licenses also require a surety bond ranging from $5,000 to $10,000 depending on the license type. Workers' compensation is mandatory for all employees.

How much does contractor insurance cost in South Dakota?

General liability insurance in South Dakota typically costs $1,200-$2,400 annually. Workers' compensation ranges from $2,800-$4,200 per year. Total insurance costs average around $6,500 annually for comprehensive coverage. Actual costs depend on your trade, experience, revenue, and location.

Do I need a license to be a contractor in South Dakota?

Yes, most construction work in South Dakota requires a contractor license from the Department of Labor and Regulation. General contractors, specialty contractors, and trade contractors (electrical, plumbing, HVAC) all need licenses. Some minor work under $2,000 may be exempt, but licensing is generally required.

What is the South Dakota contractor bond requirement?

South Dakota requires a $10,000 surety bond for general contractors. Trade contractors like electricians, plumbers, and HVAC contractors typically need $5,000 bonds. Bonds protect consumers from contractor negligence, fraud, or contract violations.

How long does it take to get a South Dakota contractor license?

South Dakota contractor license processing typically takes 2-3 weeks after submitting a complete application. This includes time for background checks, insurance verification, and documentation review. Having all required documents ready can speed up the process significantly.

Can I work in multiple South Dakota counties with one license?

Yes, a South Dakota state contractor license allows you to work in all 66 counties. However, some municipalities may have additional local permit requirements. Always check with local building departments before starting work in a new area.

What happens if I work without a South Dakota contractor license?

Working without a proper South Dakota contractor license is illegal and can result in fines up to $1,000 per violation, stop-work orders, and potential criminal charges. You cannot legally collect payment for unlicensed work, and insurance may not cover claims from unlicensed activities.

Do I need workers' compensation insurance in South Dakota?

Yes, South Dakota requires workers' compensation insurance for all employees in the construction industry. This includes part-time and seasonal workers. The coverage must include medical expenses, lost wages, and disability benefits. Sole proprietors can elect coverage but it's not required unless mandated by contract.

How often do I need to renew my South Dakota contractor license?

South Dakota contractor licenses must be renewed annually. You'll need to maintain insurance and bonding, pay renewal fees, and ensure continuing education requirements are met. It's important to renew before expiration to avoid penalties and work stoppages.

What continuing education is required for South Dakota contractors?

South Dakota requires 4 hours of continuing education annually for license renewal. This includes safety training and updates on building codes and regulations. Courses must be approved by the Department of Labor and Regulation and completed through licensed providers.

Can I get South Dakota contractor insurance if I'm just starting out?

Yes, new contractors can obtain insurance in South Dakota. While rates may be higher for startups due to limited experience, coverage is available. Providing business plans, financial statements, and demonstrating relevant trade experience can help secure better rates.

What's the difference between a South Dakota business license and contractor license?

A South Dakota business license registers your company with the state for tax and legal purposes. A contractor license specifically authorizes you to perform construction work. You need both - the business license establishes your company, while the contractor license permits construction activities.

Do subcontractors need their own insurance in South Dakota?

Yes, subcontractors should carry their own general liability and workers' compensation insurance. While general contractors' policies may provide some coverage, independent policies ensure better protection and meet contract requirements. Many GCs require proof of subcontractor insurance.

What are the penalties for not having proper insurance in South Dakota?

Operating without required insurance can result in license suspension, fines, legal liability for accidents, and difficulty collecting payments. If workers are injured without workers' comp coverage, you could face significant personal liability and penalties from the Department of Labor.

How do I verify a South Dakota contractor's license and insurance?

Check license status through the South Dakota Department of Labor and Regulation website. For insurance verification, request current certificates directly from the contractor. Look for proper coverage amounts, policy dates, and ensure your project is listed as additional insured when appropriate.

What types of construction projects require permits in South Dakota?

Most structural work, electrical, plumbing, HVAC, and roofing projects require permits in South Dakota. Requirements vary by county and municipality. Permits typically require proof of licensing and insurance. Always check with local building departments before starting work.

Can I transfer my contractor license from another state to South Dakota?

South Dakota may recognize licenses from other states on a case-by-case basis. However, you'll still need to meet South Dakota's insurance and bonding requirements, pass any required exams, and complete the application process. Reciprocity agreements vary by trade.

What insurance coverage limits should I choose in South Dakota?

While South Dakota requires minimum $200,000 general liability, many contractors choose $1 million for better protection and to meet client requirements. Consider your project values, risk exposure, and client demands. Higher limits often cost relatively little more but provide significantly better protection.

Do I need commercial auto insurance for my work vehicles in South Dakota?

Yes, if you use vehicles for business purposes, you need commercial auto insurance. Personal auto policies typically exclude business use. Commercial coverage protects vehicles, tools, equipment, and provides liability protection while driving for work purposes.

How do harsh South Dakota winters affect my insurance needs?

South Dakota's severe winters create unique risks requiring specialized coverage. Consider seasonal work interruption insurance, equipment protection against freeze damage, and increased liability coverage for winter hazards. Many contractors also need storage coverage for equipment during inactive winter months.

What should I do if I'm injured on a job site in South Dakota?

Immediately report the injury to your employer and seek medical attention. If you're covered by workers' compensation, it should cover medical expenses and lost wages. Document the incident thoroughly and follow proper reporting procedures to ensure your claim is processed correctly.

Are there special requirements for agricultural construction in South Dakota?

Agricultural construction may have specific insurance requirements depending on the project type. Livestock facilities, grain storage, and processing plants often require higher liability limits and specialized coverage. Environmental liability coverage is also recommended for agricultural projects.

How do I handle insurance claims in South Dakota?

Report claims immediately to your insurance carrier. Document all damage with photos and written descriptions. Cooperate fully with insurance investigators and provide requested documentation promptly. Consider consulting with legal counsel for significant claims.

What is the process for getting a South Dakota electrical contractor license?

Electrical contractors need a journeyman electrician license first, then can apply for a contractor license. Requirements include a $5,000 surety bond, general liability insurance, electrical experience verification, and passing the electrical contractor exam.

Can I do emergency repairs without a South Dakota contractor license?

Emergency repairs to prevent immediate danger may have limited exceptions, but proper licensing is generally still required. After emergencies, you must obtain proper permits and licenses before continuing work. Don't risk penalties - get properly licensed before offering emergency services.

The Mount Rushmore State

South DakotaContractor Insurance

Comprehensive contractor insurance solutions for the Mount Rushmore State. Expert coverage for all contractor types with competitive rates and local expertise.

895K+

Population

15K+

Contractors

Counties

No State License Required

Business Friendly

Growing Construction Market

South Dakota Requirements

General Contractors

No state license required

Electrical/Plumbing

State licensing required

General Liability

$1M per occurrence recommended

South Dakota Regulatory Overview

Key agencies, processes, and compliance requirements for South Dakota contractors

Key Regulatory Agencies

Department of Labor and Regulation

Primary licensing authority for contractors

Services:

Contractor license applications and renewals
Trade licensing (electrical, plumbing, HVAC)
License verification and status checks
Enforcement and compliance monitoring

Contact Information:

(605) 773-3101

dlr@state.sd.us

dlr.sd.gov

700 Governors Drive, Pierre, SD 57501

Department of Revenue

Business registration and tax compliance

Services:

Business license registration
Sales tax permits and compliance
Contractor tax requirements
Business entity formation

Contact Information:

(605) 773-3311

revenue@state.sd.us

dor.sd.gov

445 E Capitol Ave, Pierre, SD 57501

Department of Environment and Natural Resources

Environmental permits and compliance

Services:

Water and wastewater system permits
Air quality permits for construction
Solid waste management permits
Environmental compliance monitoring

Contact Information:

(605) 773-3151

denr.info@state.sd.us

denr.sd.gov

523 E Capitol Ave, Pierre, SD 57501

Department of Transportation

Highway and transportation construction oversight

Services:

Highway construction contracts
Transportation project permits
Commercial vehicle regulations
Right-of-way permits

Contact Information:

(605) 773-3265

sddot@state.sd.us

dot.sd.gov

700 E Broadway Ave, Pierre, SD 57501

Key Regulatory Processes

Contractor Licensing Process

Administered by: Department of Labor and Regulation

Timeline: 2-4 weeks

Fees: $50-$100 depending on trade

Complete contractor license application

Provide proof of insurance and bonding

Submit financial responsibility documentation

Pass required trade examinations

Pay application and license fees

Receive license approval and certificate

Business Registration Process

Administered by: Department of Revenue

Timeline: 1-2 weeks

Fees: $50-$150 depending on entity type

Choose business entity type (LLC, Corp, etc.)

Obtain federal EIN from IRS

Apply for South Dakota business license

Obtain local permits as required

Environmental Permit Process

Administered by: Department of Environment and Natural Resources

Timeline: 4-8 weeks

Fees: Varies by project scope

Determine applicable environmental regulations

Complete environmental permit applications

Provide project plans and specifications

Submit environmental impact assessments

Pay permit fees and review costs

Receive permits and compliance requirements

Ongoing Compliance Requirements

License Maintenance

Requirements:

Annual license renewals by December 31st
Continuing education completion
Maintain insurance and bonding
Update business information changes
Pay renewal fees on time

Penalties for Non-Compliance:

Late fees, license suspension, work stoppage orders

Safety Compliance

Requirements:

OSHA safety standards compliance
Worker safety training programs
Accident reporting procedures
Safety equipment and protocols
Regular safety inspections

Penalties for Non-Compliance:

Fines up to $70,000 per violation, criminal charges possible

Tax Compliance

Requirements:

Monthly sales tax filing and payment
Quarterly payroll tax reporting
Annual income tax filing
Worker classification compliance
Record keeping requirements

Penalties for Non-Compliance:

Penalties up to 25% of tax owed, interest charges

Important Annual Deadlines

March 15

Corporate income tax filing deadline

April 15

Individual income tax filing deadline

October 31

Workers' compensation annual report due

December 31

Contractor license renewal deadline

Regulatory Advisory

Regulations and requirements can change frequently. Always verify current requirements with the appropriate agency before beginning work or submitting applications.

Local municipalities may have additional requirements beyond state regulations. Check with local building departments and planning offices for specific project requirements.

Consider working with licensed professionals (attorneys, accountants, insurance agents) to ensure full compliance with all applicable regulations.

Need Help Navigating South Dakota Regulations?

Our regulatory compliance specialists understand South Dakota's complex requirements. We'll help you navigate the licensing process and maintain ongoing compliance.

Get Compliance Help: (844) 967-5247

South Dakota Contractor License Requirements

Complete guide to licensing, bonding, and insurance requirements for South Dakota contractors

License Types & Requirements

License Type	Bond Amount	Insurance Minimum	Fee	Renewal
General Contractor New construction, Major renovations...	$10,000	$200,000 GL	$100	Annual
Electrical Contractor Electrical installation, Wiring systems...	$5,000	$200,000 GL + E&O	$50	Annual
Plumbing Contractor Plumbing installation, Pipe repairs...	$5,000	$200,000 GL	$50	Annual
HVAC Contractor Heating systems, Air conditioning...	$5,000	$200,000 GL	$50	Annual
Roofing Contractor Roof installation, Roof repairs...	$10,000	$200,000 GL	$75	Annual
Concrete Contractor Concrete foundations, Sidewalks...	$5,000	$200,000 GL	$50	Annual

General Licensing Requirements in South Dakota

Valid South Dakota business registration

Proof of workers' compensation insurance

General liability insurance certificate

Surety bond (varies by license type)

Financial responsibility documentation

Background check and fingerprinting

Trade experience verification

Continuing education completion

South Dakota Department of Labor - Licensing Authority

Contact Information

• Website: dlr.sd.gov
• Phone: (605) 773-3101
• Address: 700 Governors Drive, Pierre, SD 57501
• Email: dlr@state.sd.us

Online Services

• Online license applications
• License verification system
• Renewal processing
• Status checking portal

Ready to Get Licensed in South Dakota?

Let our South Dakota insurance experts help you meet all licensing requirements with the right insurance coverage and bonding solutions.

Get Licensed: (844) 967-5247

South Dakota Contractor Insurance Requirements

Comprehensive guide to mandatory and recommended insurance coverage

Insurance Types & Coverage Limits

Insurance Type	State Minimum	Recommended	Annual Cost	Required
General Liability Protects against third-party bodily injury and property damage claims	$200,000	$1,000,000	$1,200-$2,400	Required
Workers' Compensation Required for all employees, covers medical expenses and lost wages	State Minimum	Full Coverage	$2,800-$4,200	Required
Commercial Auto Coverage for business vehicles and equipment transport	$50,000	$1,000,000	$1,800-$3,600	Optional
Professional Liability Errors and omissions coverage for design and consulting work	$250,000	$1,000,000	$800-$1,500	Optional
Tools & Equipment Protects business tools, equipment, and materials	Actual Value	Replacement Cost	$600-$1,200	Optional
Cyber Liability Data breach and cyber attack protection	$100,000	$1,000,000	$400-$800	Optional

General Liability Insurance Requirements

Bodily injury to third parties on job sites

Property damage to client or neighboring properties

Products and completed operations coverage

Personal and advertising injury protection

Medical expense coverage for minor injuries

Legal defense costs and settlements

South Dakota Minimum Requirement

South Dakota requires a minimum of $200,000 in general liability coverage. However, most contractors choose $1 million limits to meet client requirements and provide better protection.

Annual Insurance Cost Breakdown

Basic Package

General Liability$1,200

Workers' Comp$2,800

Total Annual$4,000

Minimum coverage to meet state requirements

Premium Package

All Basic + Recommended$7,500

Professional Liability$1,200

Cyber + Tools Coverage$1,000

Total Annual$9,700

Complete protection for high-risk projects

Important Insurance Notice

South Dakota contractors must maintain continuous insurance coverage throughout the license period. Lapses in coverage can result in license suspension and legal penalties.

• Insurance certificates must be filed with licensing authority
• Coverage amounts may vary by project type and contract requirements
• Additional insured requirements are common for commercial projects
• Some municipalities may have higher insurance requirements

Get the Right Coverage for Your South Dakota Business

Our South Dakota insurance specialists will help you choose the right coverage at competitive rates. Get a free quote tailored to your specific trade and needs.

Get Quote: (844) 967-5247

South Dakota Contractor Bonding Requirements

Essential bonding information for South Dakota contractors and construction professionals

Required Bond Types & Amounts

Bond Type	Bond Amount	Annual Cost	Purpose
Contractor License Bond Required for: General Contractors, Specialty Contractors...	$10,000	$100-$300/year	Guarantees compliance with licensing laws and regulations
Electrical Contractor Bond Required for: Licensed Electricians, Electrical Contractors	$5,000	$50-$150/year	Protects consumers from electrical work violations
Plumbing Contractor Bond Required for: Licensed Plumbers, Plumbing Contractors	$5,000	$50-$150/year	Ensures proper plumbing installation and repairs
HVAC Contractor Bond Required for: HVAC Technicians, HVAC Contractors	$5,000	$50-$150/year	Guarantees proper HVAC system installation
Public Works Bond Required for: Municipal Projects, State Projects...	Project Value	1-3% of bond amount	Guarantees completion of public construction projects
Performance Bond Required for: Large Commercial, Government Projects...	100% Project Value	1-5% of bond amount	Guarantees project completion per contract terms

Benefits of Contractor Bonding

Consumer Protection

Bonds protect consumers from contractor negligence, fraud, or failure to complete work according to contract terms.

Professional Credibility

Having proper bonding demonstrates financial responsibility and professionalism to potential clients.

Legal Compliance

Bonds ensure compliance with South Dakota licensing requirements and building codes.

Business Growth

Bonded contractors can bid on larger projects and qualify for more lucrative contracts.

Bond Application Process

Complete bond application with surety company

Provide financial statements and credit information

Submit business license and contractor credentials

Pay bond premium (typically annual payment)

Receive bond certificate for license application

File bond with South Dakota Department of Labor

Maintain bond throughout license period

Renew bond annually or as required

Bond Application Requirements

Valid South Dakota business license

Contractor license application

Personal and business financial statements

Credit score of 650 or higher (preferred)

Trade experience documentation

Character references

Clean criminal background check

Completed surety bond application

Important Bonding Information

Bond Duration & Renewal

• Most contractor bonds are continuous until cancelled
• Annual premium payments typically required
• 30-day notice required for bond cancellation
• Bond must remain active throughout license period

Claims & Liability

• Bond covers consumer losses up to bond amount
• Contractor is liable to reimburse surety company
• Claims can affect future bonding ability
• Legal defense not provided by bond

Factors Affecting Bond Costs

Credit Score

750+1-2% rate

700-7492-3% rate

650-6993-5% rate

Below 6505-10% rate

Business Financials

• Strong cash flow reduces rates
• Low debt-to-income ratio preferred
• Business bank statements required
• Financial statements may be audited

Industry Experience

• 3+ years experience preferred
• Clean license history important
• No recent claims or violations
• Trade certifications help

Need Help with South Dakota Contractor Bonds?

Our bonding specialists can help you secure the right bonds at competitive rates. We work with multiple surety companies to find you the best options.

Get Bond Quote: (844) 967-5247

South Dakota Trade-Specific Requirements

Detailed licensing, insurance, and certification requirements by trade

Electrical Contractor

South Dakota licensing and insurance requirements

License Required

Required

Bond Amount

$5,000

Insurance Minimum

$200,000 GL + E&O

Experience Required

4 years as journeyman

Examination

State electrical exam

License Duration

Annual renewal

Special Requirements & Certifications

Master electrician license required

Continuing education: 24 hours every 3 years

Must employ licensed journeyman

Electrical work permit required for all jobs

Code compliance certification

Safety training documentation

Universal Requirements for All Trades

Basic Requirements

Valid South Dakota business license

Clean criminal background check

Financial responsibility documentation

Proof of trade experience

Insurance Requirements

General liability insurance certificate

Workers' compensation (if employees)

Surety bond filed with state

Commercial auto (if using vehicles)

Important Trade Licensing Notes

• Some trades may require additional local permits or licenses depending on the municipality

• Continuing education requirements must be completed before license renewal

• All insurance policies must name the licensing authority as certificate holder

• Specialty certifications may be required for certain types of work (e.g., medical gas, fire systems)

• Some trades have reciprocity agreements with neighboring states - check current agreements

Typical Application Timeline

Week 1

Gather documents, complete application, secure insurance and bonding

Week 2

Submit application, schedule exam, background check processing

Week 3

Take examination, await results, application review by department

Week 4

License approval and issuance, begin legal contractor operations

Ready to Get Licensed in Your Trade?

Our South Dakota licensing specialists understand the specific requirements for each trade. We'll help you navigate the process and secure the right insurance coverage.

Get Trade-Specific Quote: (844) 967-5247

South Dakota Service Areas

Comprehensive contractor insurance coverage across all 66 South Dakota counties

Major Cities We Serve

Sioux Falls

196K

+16.5%

Rapid City

79K

+8.9%

Aberdeen

28K

+3.2%

Brookings

25K

+12.1%

Watertown

22K

+4.7%

Mitchell

16K

+2.8%

Yankton

15K

+1.9%

Pierre

14K

+3.5%

Huron

13K

+0.8%

Spearfish

12K

+7.3%

Regional Coverage Areas

Eastern South Dakota

22 Counties

Agricultural and urban development hub

Key Markets:

Sioux Falls metro growthAgricultural facilitiesCommercial development

Black Hills Region

8 Counties

Tourism and mining industry construction

Key Markets:

Tourism infrastructureMining operationsRecreational facilities

Central South Dakota

15 Counties

Agricultural and government construction

Key Markets:

State government projectsRural developmentAgricultural buildings

Northern Border

21 Counties

Agricultural and energy sector development

Key Markets:

Wind energy projectsAgricultural processingRural infrastructure

Growing Construction Markets

Agricultural Construction

+18%

Grain elevators, livestock facilities, and processing plants

Opportunities:

Modern dairy facilities
Grain storage expansion
Livestock buildings

Energy Infrastructure

+25%

Wind farms, transmission lines, and renewable energy projects

Opportunities:

Wind turbine installation
Solar farm development
Grid infrastructure

Tourism & Recreation

+12%

Hotels, campgrounds, and recreational facilities

Opportunities:

Black Hills development
RV parks
Tourism amenities

Healthcare Facilities

+15%

Hospitals, clinics, and senior living facilities

Opportunities:

Rural healthcare centers
Senior housing
Medical facilities

Statewide Coverage Guarantee

Counties Covered

100%

South Dakota Coverage

24/7

Local Support

From the Black Hills in the west to the Missouri River valley in the east, we provide comprehensive contractor insurance coverage throughout South Dakota. Our local expertise ensures you meet all regional requirements and regulations.

Working in multiple states? We also serve neighboring states including North Dakota, Minnesota, Iowa, Nebraska, Wyoming, and Montana.

South Dakota Construction Considerations

Winter Conditions

• Limited construction season (April-November)
• Harsh winter weather delays
• Frozen ground conditions
• Snow and ice safety concerns
• Equipment winterization needs

Wind & Weather

• High wind exposure statewide
• Severe thunderstorm potential
• Tornado risk in eastern regions
• Hail damage considerations
• Temperature extremes

Rural Challenges

• Remote project locations
• Limited local suppliers
• Extended travel distances
• Rural infrastructure constraints
• Seasonal access limitations

Ready to Work Anywhere in South Dakota?

Get properly licensed and insured to work throughout South Dakota with coverage that meets all local and state requirements, including specialized coverage for harsh weather conditions.

Call (844) 967-5247

Frequently Asked Questions

Common questions about South Dakota contractor insurance and licensing requirements

Still Have Questions About South Dakota Requirements?

Our South Dakota-licensed insurance professionals are here to help. Get personalized answers about licensing, insurance requirements, and coverage options for your specific situation.

Call Expert: (844) 967-5247

Get Your South Dakota Contractor Insurance Quote

Licensed agents ready to help you meet South Dakota requirements and save money

Why Choose Contractors Choice Agency?

South Dakota Insurance Experts

Our agents are licensed in South Dakota and understand all state-specific requirements for contractor insurance and licensing.

Contractor Specialists

We exclusively serve contractors and construction professionals, so we understand your unique risks and coverage needs.

Fast, Reliable Service

Get quotes quickly and certificates issued same-day. We work at the speed your business demands.

Contact Information

(844) 967-5247

info@contractorschoiceagency.com

Serving all 66 South Dakota counties
Sioux Falls • Rapid City • Aberdeen • Brookings • Watertown

Monday - Friday: 8:00 AM - 6:00 PM CST
Emergency service available

Get Your Free Quote Today

✓ General Liability Insurance

Starting at $1,200/year

✓ Workers' Compensation

Competitive rates for South Dakota

✓ Surety Bonds

$5,000-$10,000 contractor bonds available

✓ Commercial Auto

Protect your business vehicles

Call Now: (844) 967-5247

Average Savings: 18% below state average
Same-day certificates available

A+

BBB Rating

5,000+

Contractors Served

15+

Years Experience

South Dakota Construction Market Expertise

Agricultural Construction

Specialized coverage for grain elevators, livestock facilities, and agricultural processing buildings across rural South Dakota.

Energy Projects

Insurance solutions for wind farms, solar installations, and renewable energy infrastructure projects.

Seasonal Considerations

Understanding South Dakota's harsh winters and how they affect construction schedules and insurance needs.

Ready to Get Licensed and Insured in South Dakota?

Don't let insurance requirements hold up your business. Get a quote today and start working legally in South Dakota with proper coverage protection.

Call (844) 967-5247

South Dakota Resources

Featured South Dakota Insurance Guides

Essential insurance information specifically for South Dakota contractors

October 30, 2024•15 min read

Workers Compensation Complete Guide

Comprehensive guide to workers compensation insurance including South Dakota Department of Labor requirements.

September 25, 2024•9 min read

Commercial Auto Insurance for Contractors

Essential commercial auto insurance coverage for contractors including South Dakota minimum requirements.

January 15, 2024•12 min read

Professional Liability Insurance for Contractors

Complete guide to professional liability insurance coverage for South Dakota contractors and construction professionals.

View All South Dakota Insurance Articles

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License Type

Bond Amount

Insurance Minimum

Fee

Renewal

General Contractor

New construction, Major renovations...

$10,000

$200,000 GL

$100

Annual

Electrical Contractor

Electrical installation, Wiring systems...

$5,000

$200,000 GL + E&O

$50

Annual

Plumbing Contractor

Plumbing installation, Pipe repairs...

$5,000

$200,000 GL

$50

Annual

HVAC Contractor

Heating systems, Air conditioning...

$5,000

$200,000 GL

$50

Annual

Roofing Contractor

Roof installation, Roof repairs...

$10,000

$200,000 GL

$75

Annual

Concrete Contractor

Concrete foundations, Sidewalks...

$5,000

$200,000 GL

$50

Annual

Insurance Type

State Minimum

Recommended

Annual Cost

Required

General Liability

Protects against third-party bodily injury and property damage claims

$200,000

$1,000,000

$1,200-$2,400

Required

Workers' Compensation

Required for all employees, covers medical expenses and lost wages

State Minimum

Full Coverage

$2,800-$4,200

Required

Commercial Auto

Coverage for business vehicles and equipment transport

$50,000

$1,000,000

$1,800-$3,600

Optional

Professional Liability

Errors and omissions coverage for design and consulting work

$250,000

$1,000,000

$800-$1,500

Optional

Tools & Equipment

Protects business tools, equipment, and materials

Actual Value

Replacement Cost

$600-$1,200

Optional

Cyber Liability

Data breach and cyber attack protection

$100,000

$1,000,000

$400-$800

Optional

Bond Type

Bond Amount

Annual Cost

Purpose

Contractor License Bond

Required for: General Contractors, Specialty Contractors...

$10,000

$100-$300/year

Guarantees compliance with licensing laws and regulations

Electrical Contractor Bond

Required for: Licensed Electricians, Electrical Contractors

$5,000

$50-$150/year

Protects consumers from electrical work violations

Plumbing Contractor Bond

Required for: Licensed Plumbers, Plumbing Contractors

$5,000

$50-$150/year

Ensures proper plumbing installation and repairs

HVAC Contractor Bond

Required for: HVAC Technicians, HVAC Contractors

$5,000

$50-$150/year

Guarantees proper HVAC system installation

Public Works Bond

Required for: Municipal Projects, State Projects...

Project Value

1-3% of bond amount

Guarantees completion of public construction projects

Performance Bond

Required for: Large Commercial, Government Projects...

100% Project Value

1-5% of bond amount

Guarantees project completion per contract terms