Insurance & Risk
Small Business Insurance: What Service Trades Actually Need
Short answer
Solo trades need general liability and commercial auto at minimum. Add workers' comp the day you hire anyone (even part-time in most states), inland marine for tools, and a professional liability policy if you give expert advice.
Insurance is the single most overpriced and underexplained thing in a service business. Half the policies agents will sell you are overkill; the two or three you need are non-negotiable.
The four policies that matter
| Coverage | What it does |
|---|---|
| General liability (GL) | Pays if you damage a customer's property or injure someone on the job |
| Commercial auto | Personal auto policies exclude "business use" — a claim in your work truck could be denied |
| Workers' comp | Pays medical + lost wages if a crew member is injured. Required by law in most states once you have employees |
| Inland marine / tools | Covers tools and equipment in transit or at a job site (homeowner's policy won't) |
Typical premiums for a solo trade (US, 2026)
- General liability: $400–$900 / year for $1M / $2M limits
- Commercial auto: $1,200–$2,400 / year per vehicle
- Inland marine: $150–$400 / year for $10k–$25k in tools
- Workers' comp: 2–15% of payroll depending on trade and state
What you can skip (usually)
Cyber liability, EPLI, and directors-and-officers policies are almost never worth it for a solo operator or crew of five. Revisit them once you have real payroll, sensitive customer data, or outside investors.
Umbrella policies are worth it above ~$500k in annual revenue or if you work on high-value properties — a $1M umbrella typically costs $300–$500 / year.
How to shop without wasting a week
- Get three quotes from independent agents (not captive agents like State Farm). Independents shop 10+ carriers.
- Ask for the same limits from each: $1M per occurrence / $2M aggregate for GL is standard.
- Ask about deductibles. A $1,000 GL deductible can knock 15–20% off the premium.
- Bundle GL + tools + auto with the same carrier for a multi-line discount.
- Re-shop every 24 months. Loyalty gets you nothing.
Frequently asked questions
Do I need workers' comp for a 1099 subcontractor?
In most US states, no — but the IRS and your state can reclassify a "1099" as an employee if you control their hours and methods. When in doubt, cover them under a policy that includes independent contractors.
My homeowner's policy covers my tools, right?
Only up to a small sublimit (often $2,500) and only at home. Once tools leave the property or are used commercially, you need inland marine.
Can I show a customer proof of insurance quickly?
Yes — ask your agent for a Certificate of Insurance (COI). Most carriers email one within an hour, and property managers, GCs, and larger customers will require it before you start work.
Run the whole job in one app.
Signed estimates, invoices, payments, and customer records — Glo Invoice keeps the paperwork side of the business quiet so you can work.