As a general contractor, subcontractor, or tradesman, you know that the right insurance coverage is vital to the financial health of your business. Finding the right coverage at a price you can afford will help provide you with peace of mind and confidence in knowing that your business is protected against a potentially devastating financial loss. Learn more about what factors your insurance company will consider in pricing your premiums.
The Basic Cost Of General Contractor Insurance
The average cost for a general contractor insurance policy that provides the minimum coverage of $1 million is about $90 per month. That cost can vary depending on where your business is located, among other factors described below.
What Risks Would A Basic Policy Cover?
A basic contractor insurance policy provides general liability coverage. Everyday on-the-job activities that just about every contractor needs to insure against come from on the job activities such as operating heavy equipment and machinery on a project, weather-related work interruptions, and occasional visits by your clients, other contractors, and suppliers.
A basic general contractor insurance policy covers accidents and injuries, including:
You are covered if you or one of your employees damages your client’s property or the property of a third party while providing your services. For example, you would be protected if you damage a freshly painted drywall while working on plumbing.
You are covered if an injury to an employee, client, or visitor occurs at your business or on your client’s property while doing business. For example, you would be protected for damages if a subcontractor trips over one of your extension cords and breaks an arm at one of your project sites, and cannot work for some time.
The medical bills associated with injuries are covered. For example, the subcontractor’s medical bills to treat the broken arm sustained in the prior example.
You are covered if you are sued for libel, slander, or defamation based on a false advertisement, such as a television commercial that causes financial injury to another business or third party.
If you need additional coverage or higher limits, your premium costs will increase. Your insurance broker can help you determine whether you should have additional coverage and the appropriate limits.
Types Of General Contractor Insurance Coverage To Consider
If you already have insurance but are experiencing growth in your business or would like to review and revisit your current coverage, an experienced insurance broker can help you understand your coverage and recommend additional specialized insurance to fill in any gaps.
Additional policies commonly purchased by contractors consist of one or more of the following:
If you have employees, workers’ comp insurance is required as a condition to conduct business in most states. It covers the medical expenses and lost wages if one of your employees is injured on the job.
Commercial auto insurance is necessary if you have vehicles that you or your employees use for business purposes.
Equipment coverage will cover damage and theft of the equipment and machinery you own and operate as part of your contractor business.
Errors and Omissions
E&O insurance insures you against damages arising out of mistakes in judgment or faulty advice given to a client, or due to hiring a subcontractor who performs inferior work which must be remedied.
What Factors May Affect Your Premium Cost?
The total premium cost of a general contractor insurance policy for your business varies. It depends on the type of coverage you need, your deductible amounts, and the coverage limits, along with other considerations such as the following:
Area Of Operation
Where your business is located and the amount of travel necessary to your job sites, along with the distances you or your employees have to travel while on the job, will play an important role in determining your premium rates. Your rates will be higher if you operate predominantly in a highly congested, higher cost metropolitan area.
Nature Of Services Provided
The type of work you provide as a contractor is important to defining your risk profile. For example, suppose you are a general contractor that oversees larger commercial construction projects. In that case, your risks are higher than those of a plumbing contractor who works primarily on smaller residential projects. Business Equipment and Property:
The value, ages, and types of vehicles, the driving records of your employees, any machinery and equipment your business owns and operates, along with the value of any real property it owns, all will affect your premium costs.
Generally, a large contractor that generates a significant amount of revenue each year will have higher premium costs than a smaller contractor.
Number of Employees: With more employees, the business will need higher coverages on workers’ comp and perhaps several other types of coverage to properly cover the increased risk that goes along with a larger workforce.
Claims History And Experience Level
The claims history of your business and your employees’ experience levels provide evidence of how safely your company operates and the business’s priority on safety in its operations.
Contact Our General Contractor Insurance Experts For More Information
For advice and an accurate quote on general contractor insurance tailored for the unique needs of your business, contact Southern States Insurance.