Insurance in Virginia

Virginia's insurance picture for a trades business has three pieces: what DPOR requires as a condition of your contractor license, what the Virginia Workers' Compensation Act requires once you start hiring, and what the commercial market will demand before a general contractor or a jobsite owner will let you on the property. License-side requirement. The Board for Contractors does not set a blanket statutory minimum for general liability on the license itself the way some states do. Instead, 18 VAC 50-22 requires applicants to demonstrate financial responsibility and, for Class A and B, to file financial statements; the Board can require a surety bond where the numbers fall short. Insurance minimums on specific specialties (for example, asbestos or lead abatement) are set inside the corresponding specialty regulations. Always check the current version of 18 VAC 50-22 linked below for what applies to the class and specialty you are pursuing. Workers' compensation. The Virginia Workers' Compensation Act (Code of Virginia Title 65.2) requires coverage once an employer regularly has three or more employees in the same business (§65.2-101). Subcontractors and their employees can count toward the three-employee threshold under the statutory employer provisions in §65.2-302. Unlike Florida, Virginia does not drop the construction threshold to one employee. The three-employee rule is the statewide trigger, with an exception that underground coal mine operators must carry coverage regardless of size. The Virginia Workers' Compensation Commission (VWC) administers the program and investigates uninsured employers; civil penalties can run up to $250 per day of non-compliance under §65.2-805. Other coverages you will actually need: - Commercial general liability. GCs and commercial owners commonly require $1M per occurrence / $2M aggregate before they will give you a certificate of insurance. Residential customers rarely ask but should. - Commercial auto for trucks and vans used on the job. Personal auto policies carve out business use. - Hired and non-owned auto for employees driving their own vehicles on company business. - Inland marine (contractor's equipment) for tools and equipment on the job site and in transit. - Pollution liability for refrigerants, solvents, fuel handling, and lead/asbestos work. Relevant for HVAC and mechanical trades. - Umbrella for $1M or $2M over the underlying general liability. Required by many public-project specs. Surety bonds. A license bond may be required if your Class A or B financial statement does not meet the Board's threshold; performance and payment bonds are driven by the job, not the license. For state and local public work in Virginia, the Little Miller Act (Code §2.2-4337) requires performance and payment bonds on construction contracts over $500,000 (and over $100,000 for transportation contracts). Shop the market annually. Virginia trade-association programs (ABC Virginia, AGC Virginia, PHCC of Virginia, IEC Chesapeake) often price group coverage better than street rates. Get three quotes and compare exclusions line by line; the cheapest policy with the wrong exclusion will cost you the job.