Insurance You Need for a Roofing Business: Beyond General Liability

One uninsured claim can end a roofing business. A worker falls off a ladder. A truck rear-ends a minivan. A homeowner sues over a leak from last year's install. Each of these events is a possible multi-hundred-thousand-dollar loss. Proper insurance is not optional, it is the difference between a bad day and bankruptcy.

The Five Policies You Actually Need

1. General liability
2. Workers compensation
3. Commercial auto
4. Professional liability (E&O) or completed operations
5. Surety bond (if required)

Some states or cities mandate specific limits. Others let you choose. The numbers below are industry-standard minimums for a 5 to 20-employee roofing company.

General Liability: $1M Per Occurrence, $2M Aggregate

General liability covers bodily injury and property damage caused to third parties by your business operations. Standard limits:

• $1,000,000 per occurrence
• $2,000,000 aggregate (annual cap)
• $1,000,000 products/completed operations
• $100,000 fire damage
• $5,000 medical expense

Cost: $3,500 to $12,000 annually for a small roofing company depending on revenue, claims history, and state.

What It Covers

A worker drops a hammer and it cracks the homeowner's windshield. A ladder slides and damages the gutter. An installed roof leaks and damages the homeowner's drywall. All covered under GL.

What It Does Not Cover

Injury to your own workers (that is workers comp). Damage to your own trucks (that is commercial auto). Faulty workmanship in some policies (check the endorsements). Pollution (separate policy).

Workers Compensation: State-Mandated

Workers comp covers your employees for on-the-job injuries. Required by state law in 49 states (Texas is voluntary, but practically required).

Roofing is a high-risk trade. Your workers comp rate is typically $15 to $45 per $100 of payroll depending on state and experience modifier. That means $100,000 in payroll can cost $15,000 to $45,000 in workers comp premium.

How to Reduce Rates

• Maintain a low experience modifier (fewer claims = lower rate)
• Enroll in safety programs (some states give premium credits)
• Use safety equipment consistently (harnesses, ladders, PPE)
• Document a written safety program

A company with a .85 mod factor pays 15% less than the baseline. A company with a 1.35 mod factor pays 35% more. Over 5 years, that difference can be six figures.

1099 Contractors and Workers Comp

If you pay 1099, you are not paying workers comp for those workers directly. But if a 1099 worker is hurt on your job and they do not have their own coverage, your GL policy probably will not cover it and you may be liable for the medical costs.

Best practice: require all 1099 contractors to provide a certificate of insurance showing their own workers comp coverage. Keep the certificate on file. If a 1099 worker cannot provide their own coverage, either do not hire them or treat them as W-2.

Commercial Auto: $1M Liability Minimum

Commercial auto covers your business vehicles for liability, collision, and comprehensive.

• $1,000,000 combined single limit liability (minimum for most states)
• Collision coverage ($500 to $1,000 deductible)
• Comprehensive coverage
• Uninsured motorist coverage
• Hired and non-owned auto coverage

Cost: $2,500 to $6,500 per truck annually depending on driver history, state, and vehicle value.

Personal Auto Is Not Enough

If your employee drives their personal truck to a job site and gets in an accident, their personal auto policy will usually deny the claim because it was being used for business. You need commercial auto on any vehicle used for work, or at minimum "hired and non-owned auto" coverage on your commercial policy.

Professional Liability / Errors and Omissions

E&O covers claims related to workmanship, design advice, or professional services. Some roofing companies skip this because GL covers most physical damage. But E&O covers scenarios GL does not.

• Installing a roof that later leaks due to design error
• Recommending a roofing system that was inadequate for the building
• Mistakes in material specification
• Claims from the homeowner's insurance subrogating against you

Cost: $1,500 to $5,000 annually for a small roofing company. Not all insurers offer E&O for roofers, so work with a broker who specializes in construction.

Surety Bond

A surety bond is not insurance for you, it is a guarantee to the state or city that you will perform the work or pay for damages. Many licensing jurisdictions require bonds.

StateTypical Bond Amount California (C-39)$15,000 Louisiana Residential$12,500 Arizona$7,500 to $42,500 by license class Oklahoma$5,000 (some cities) Florida CertifiedNot required if using financial responsibility

Cost: typically 1% to 3% of the bond amount annually. A $15,000 bond costs $150 to $450/year depending on credit.

Other Coverages to Consider

Umbrella Policy

Adds $1M to $5M of coverage above your primary policies. Essential once you are doing over $2M in annual revenue. Cost: $500 to $2,000 annually.

Tools and Equipment Coverage

Covers your ladders, compressors, nail guns, etc. against theft or damage. Cost: $300 to $800 annually for basic coverage.

Cyber Liability

If you store customer data digitally (and you do), cyber liability covers data breach costs. Cost: $750 to $2,500 annually.

Employment Practices Liability (EPLI)

Covers wrongful termination, harassment, and discrimination claims. Cost: $1,500 to $4,000 annually. Worth it once you have 10+ employees.

Real Cost for a 15-Employee Roofing Company

PolicyAnnual Cost General liability ($1M/$2M)$8,500 Workers comp ($850k payroll)$178,500 Commercial auto (5 trucks)$21,000 E&O / Professional liability$3,200 Umbrella $3M$1,800 Tools and equipment$600 EPLI$2,400 Surety bond (Louisiana)$300 Total$216,300

That looks like a lot. On $4M in revenue, it is 5.4% of top line. Underinsured companies save 2% to 3% in year one and then get wiped out in year three by a single uncovered claim.

Choosing an Insurance Broker

Work with a broker who specializes in construction and roofing. A generalist broker will miss roofing-specific endorsements (height exclusions, hot work endorsements, completed operations issues). Ask for 3 roofing company references before committing.

Review certificates of insurance every quarter. Insurance companies send COIs with effective dates and expiration dates. Expired coverage gaps are a disaster waiting to happen.

RoofKnockers tracks insurance certificate expirations per vendor and subcontractor and alerts before they lapse, so you never hand off a job to a 1099 whose coverage ended last week.

FAQ

What happens if I get caught working without required insurance?

Depends on the state. Fines of $1,000 to $25,000 per incident. License suspension. In California, unlicensed-uninsured contractors can face criminal charges. In Florida, operating without workers comp triggers mandatory stop-work orders.

Can I get insurance if I have claims history?

Yes but more expensive. High-claims companies pay 2x to 5x the baseline rate. Some insurers will decline entirely and you end up in the assigned risk pool or with non-admitted carriers at premium rates.

Do I need insurance before I start working?

Yes. Every state requires proof of insurance before issuing a license or permit. Work done without insurance is working uninsured, period. Get policies bound before taking your first job.

Is height an issue for general liability?

Sometimes. Some policies have height exclusions (no work over 3 stories). For standard residential roofing (2 stories, 35 feet max), this is rarely an issue. If you do commercial or tall residential, verify height limits with your broker.