Your experience built the business.
Your insurance program should match.

Most contractors start with general liability and workers' compensation. That's table stakes. But as your projects grow in size and complexity, so do your exposures. Here are the seven coverage lines we evaluate for every established contractor:

1. General Liability (GL)

Covers third-party bodily injury and property damage claims. Make sure your limits match the contracts you're signing — many GCs now require $2M per occurrence for subs. Also verify your policy includes completed operations coverage.

2. Workers' Compensation

Required in Georgia if you have three or more employees. Critical for trade contractors: most carriers require W2 employees — not 1099 subs — to qualify for the best rates and coverage terms. If you're heavy on 1099 labor, we need to discuss your classification strategy.

3. Commercial Auto

Covers your trucks, vans, and equipment vehicles. If employees drive personal vehicles for work, you need hired and non-owned auto coverage. Don't overlook this — auto claims are some of the most frequent and expensive.

4. Inland Marine / Equipment Floater

Your tools and equipment aren't covered by your GL policy. An equipment floater protects your investment — whether it's on the jobsite, in transit, or stolen from your truck overnight.

5. Builders Risk

Covers the structure under construction from damage during the build. On larger projects, the GC or owner may provide this — but verify it in writing. On your own jobs, you need your own policy.

6. Umbrella / Excess Liability

Provides additional limits above your GL, auto, and employers liability. For serious contractors, a $5M umbrella is increasingly standard. Larger commercial projects often require it by contract.

7. Professional Liability / Errors & Omissions

If you do any design work, engineering, or consulting as part of your services, GL won't cover design errors. Professional liability fills that gap — increasingly important for design-build contractors.

Your bonding capacity determines the size of projects you can pursue. Sureties evaluate three factors — often called the "Three C's" — when deciding how much capacity to extend.

1. Character

This is about your reputation and track record. Sureties look at: how long you've been in business, your history of completing projects on time and on budget, any litigation or claims history, and your personal credit (yes, personal credit matters in surety underwriting). Five or more years in business with clean completions is the foundation.

2. Capacity

Can you actually perform the work? Sureties evaluate your operational ability: your team's experience, your equipment, your project management systems, and your track record with projects of similar size. They want to see that you've successfully completed jobs 60-70% of the size you're now bidding before they stretch your limits.

3. Capital

Your financial strength is critical. Sureties look at working capital, net worth, and cash flow. Key ratios include working capital to backlog (ideally 10%+) and debt to equity. The cleaner your balance sheet, the more capacity you'll get.

How to improve your position

• Work with a CPA who understands construction. How your financials are presented matters. A construction-savvy CPA knows what sureties want to see.
• Keep your financials current. Sureties want to see recent statements — ideally reviewed or audited for larger capacity.
• Build a banking relationship. A line of credit shows financial stability, even if you don't use it.
• Document your completions. Keep a project history with contract values, completion dates, and references.
• Work with the right surety. Not all sureties are the same. Some specialize in growing contractors and will extend more capacity with the right relationship.

Every year, contractors get hit with unexpected audit bills — sometimes tens of thousands of dollars — because their policies were set up on estimates that didn't match reality. Here's how to avoid that.

Understanding the audit process

Workers' comp and general liability premiums are based on payroll and revenue estimates at the start of the policy. At the end of the year, the carrier audits your actual numbers. If you came in higher than estimated, you owe the difference. If you came in lower, you get a refund.

The three areas that cause audit surprises

1. Payroll underestimation

If your business grew faster than expected — you hired more people or paid more overtime — your payroll will exceed your estimate. This is the most common audit adjustment. For trade contractors: make sure your W2 payroll is properly classified. Carriers scrutinize this heavily.

2. Subcontractor costs

If your subs don't have their own workers' comp, their labor may be included in YOUR audit. Always collect certificates of insurance from every sub, and make sure they have active coverage for the dates they worked for you. Keep those COIs organized — auditors will ask for them.

3. Class code errors

Different types of work have different rates. If you're classified as a lower-risk trade but actually doing higher-risk work, the auditor will reclassify you — and bill you the difference at the higher rate. Make sure your class codes accurately reflect what you actually do.

How to protect yourself

• Review your estimates quarterly against actual payroll and revenue
• Request a mid-term adjustment if you're running significantly over
• Keep meticulous sub COIs with current coverage dates
• Verify your class codes match your actual operations
• Work with an agent who reviews this with you proactively, not just at audit time

When a subcontractor causes damage or injures someone on your project, the claim often comes to you first — especially if the sub doesn't have adequate insurance. Proper risk transfer is one of the most overlooked areas in contractor risk management.

The three pillars of subcontractor risk transfer

1. Subcontract agreements

Your subcontract should include an indemnification clause and insurance requirements. The sub should agree to hold you harmless for claims arising from their work and to name you as an additional insured on their GL policy. If you're not using written subcontracts with these provisions, you're exposed.

2. Insurance verification

Require certificates of insurance from every sub before they start work. Verify:

• GL limits meet your requirements (often $1M per occurrence minimum)
• Workers' comp is active (if they have employees)
• Auto liability is in place (if they drive to your sites)
• You are listed as additional insured on their GL
• Coverage dates span the work period

3. Ongoing compliance

Insurance verification isn't one-and-done. Policies expire. Subs let coverage lapse. You need a system to track expirations and re-verify before they come back to your jobs. The cost of a tracking system is nothing compared to the cost of a claim from an uninsured sub.

The hidden risk: 1099 vs. W2

If you're using 1099 workers who don't have their own insurance, they may be treated as your employees for workers' comp purposes. This is especially true in Georgia where the three-employee threshold triggers mandatory coverage. Make sure your labor model is properly structured.

Georgia requires licensing for residential and general contractors. Here's what you need to know to stay compliant.

Who needs a license?

In Georgia, you need a license from the State Licensing Board for Residential and General Contractors if you're contracting for residential or general construction work. This includes new construction, additions, alterations, and repairs above certain thresholds. Specialty trade contractors may be exempt at the state level but should check local requirements.

The license bond requirement

Georgia requires a $25,000 surety bond for both residential and general contractor licenses. This bond protects the public — if you violate licensing regulations, a claim can be made against your bond. The bond must remain active for the duration of your license.

Insurance requirements

Georgia requires licensed contractors to carry:

• General liability insurance with minimum limits of $500,000 per occurrence
• Workers' compensation insurance if you have three or more employees (this is a state requirement beyond licensing)

You must submit proof of insurance with your license application.

Qualifying agent requirements

Your business must have at least one "qualifying agent" who meets experience requirements and passes the relevant exam. The qualifying agent is responsible for the company's compliance with licensing laws.

Local requirements

Many Georgia cities and counties have additional licensing, bonding, or insurance requirements beyond state minimums. Check with local building departments for jurisdiction-specific requirements.

Not all insurance relationships are created equal. Understanding the difference between a transactional agent and a strategic risk advisor can significantly impact your business.

The transactional agent

A transactional agent sells you a policy. They quote your coverage once a year, send you the bill, and you don't hear from them until next renewal. They're reactive — they respond when you call with a question or claim, but they're not proactively looking for ways to improve your program.

The risk advisor

A risk advisor builds a program. They understand your business, your growth plans, and your risk profile. They proactively review your coverage, re-market your account to competing carriers annually, and bring you solutions before you know you have problems.

Key differences

• Market access: An independent risk advisor represents multiple carriers and can shop your account. A captive agent only sells one company's products.
• Proactive review: A good advisor meets with you before renewal to review claims, discuss changes in your business, and adjust coverage accordingly.
• Claims advocacy: When you have a claim, a risk advisor goes to bat for you with the carrier. They're your advocate, not the insurance company's.
• Strategic planning: A risk advisor helps you plan for growth — building bonding capacity, preparing for larger contracts, and structuring your program for where you're going, not just where you are.

Questions to ask your current agent

• When did you last shop my account to competing carriers?
• Have you reviewed my policy limits against my current contracts?
• What's your plan to help me increase my bonding capacity?
• How do you handle claims — are you involved, or do I deal with the carrier directly?

If you don't like the answers, it may be time for a different relationship.