Roofing Company Insurance: What GL, Comp, Auto, E and O, and Umbrella Actually Cover

Insurance is the second largest fixed cost at most roofing companies, behind office salaries. A $3M residential contractor typically spends $18,000 to $45,000 a year across five policies. A $10M contractor can hit $80,000 to $150,000. This guide walks through what each policy actually covers, typical premium ranges, and the three claims scenarios where coverage breaks down.

The Five Core Policies

1. Commercial General Liability (CGL or GL)
2. Workers' Compensation (WC or Comp)
3. Commercial Auto
4. Errors and Omissions (E and O), sometimes Contractor's Errors and Omissions or Professional Liability
5. Umbrella or Excess Liability

Everything else (cyber, employment practices, property, inland marine, builders risk) layers on top.

Commercial General Liability

GL covers third-party bodily injury and property damage arising from your operations. The industry standard is $1 million per occurrence, $2 million aggregate. Some GCs require $2M/$4M on commercial work.

Typical annual premium: $5,000 to $18,000 for residential contractors doing $1M to $5M in revenue. Commercial pricing is higher.

What GL covers:

• A shingle falls off your truck and breaks a car windshield.
• A crew member drops a bundle through the homeowner's skylight.
• A passerby trips on dumpster materials and breaks a wrist.
• Completed operations claims: water damage from leaks in a roof you installed 12 months ago.

What GL does not cover:

• Injuries to your own employees (that is WC).
• Defective work itself (that is usually excluded).
• Professional errors in advice or design (that is E and O).
• Damage to property you are working on at the moment (often excluded or sub-limited).

The "work product" exclusion is the most commonly misunderstood part of GL. If you install a bad roof and it leaks, GL probably covers the resulting water damage to furniture but not the cost to tear off and replace the roof itself. That is what your warranty reserve is for.

Workers' Compensation

WC is mandatory in almost every state for anyone with W-2 employees. Rates are set by classification code (NCCI 5551 for roofing in most states) and by your experience modification rate (mod or e-mod).

Typical rate: $15 to $45 per $100 of payroll in residential roofing. A $500,000 payroll costs $75,000 to $225,000 a year in WC alone at those rates. That is not a typo. Roofing is the single most expensive trade for comp.

Ways to reduce WC:

• Drive your mod rate down. A 0.85 mod saves 15% vs. a 1.00 baseline. Aggressive return-to-work programs and tight injury management are the levers.
• Payroll classification audits. Make sure office staff are coded as office, not labor.
• Captive or group programs once you are over $100,000 in comp premium.
• Safety program investment. See our safety program guide.

Commercial Auto

Covers your trucks, vans, trailers, and any owned or leased vehicle used for business. Roofing fleets are expensive to insure because they are large, often driven by young employees, and frequently loaded beyond GVWR.

Typical annual premium: $2,500 to $5,500 per vehicle for a pickup or cargo van. Box trucks run $4,500 to $8,000.

Key coverages:

• Liability: $1M/$2M standard.
• Physical damage: collision and comprehensive.
• Hired and non-owned auto: covers employees using their own vehicle for work.
• Uninsured/underinsured motorist.

Hired and non-owned auto is critical. If your estimator uses their personal car to drive to appointments and causes a wreck, your commercial auto probably does not cover it without that endorsement.

Errors and Omissions

E and O for contractors covers claims of professional negligence in design, recommendation, or scope advice. Many GL policies specifically exclude professional services liability, which is why a standalone E and O is needed.

Typical annual premium: $1,200 to $4,500 for a $1M to $5M residential contractor.

Examples of E and O claims:

• Contractor recommended a low-slope product that failed because it was specified outside its listed application.
• Contractor told the customer a roof would be "25-year" and it failed in 12.
• Contractor advised on structural issues outside their competence, leading to a collapse.

E and O is becoming standard for public adjuster-involved contractors and anyone doing commercial specification work.

Umbrella or Excess Liability

Umbrella sits on top of GL, auto, and sometimes E and O, extending coverage limits for catastrophic claims.

Typical annual premium: $1,500 to $4,000 per $1M of umbrella coverage.

Most commercial contracts require at least $2M umbrella. Larger commercial GCs require $5M or more. An umbrella policy is cheap insurance against the catastrophic loss: a crew truck causing multiple fatalities, a wrongful death from a fall off a roof your crew was on.

Premium Totals by Company Size

RevenueGLWCAutoE and OUmbrellaTotal $1M$5k$25k$8k$1.5k$2k$41.5k $3M$10k$70k$22k$2.5k$3k$107.5k $8M$18k$180k$45k$4k$6k$253k $20M$35k$400k$80k$8k$15k$538k

These are mid-range residential-heavy companies with average loss history. Commercial or storm-chase contractors run higher, especially on comp.

Working With Your Agent

Use an agent who specializes in contractors. Three signs of a good one:

• They market your policy to at least three carriers at each renewal.
• They review certificates of insurance from your subs, not just hand you forms.
• They know your state's WC rules cold and know the current posted rates.

Switching agents mid-policy is usually easy. Most agents are happy to compete for the book of business.

Certificates of Insurance

Every sub you hire should provide a current COI showing GL, WC, and auto with you listed as additional insured. No COI, no work. Roofers who skip this step end up paying premiums on subs' labor when their WC auditor reclassifies them as employees.

Inside RoofKnockers

RoofKnockers tracks sub COIs with expiration date alerts and stores renewal documents on each subcontractor profile. Expired COIs block scheduling in the field. See our OSHA guide and safety program for the other risk-management pillar.

Bottom Line

Insurance is not a commodity. Buy the five core policies from a contractor-specialist agent. Understand what each one covers and, more importantly, what each excludes. Manage your mod rate. Track sub COIs. The total cost for a $3M contractor is about $100,000 a year, which is three points of revenue. Skip a policy and you put the whole company at risk.