How Much Does Contractor Insurance Cost?

Wondering how much Contractor insurance will cost for your business? The price of Contractor insurance can vary widely depending on the type of work you do, the size of your business, your claims history, and the specific coverage you choose.

In this article, we’ll explain the key factors that influence your premium, and show you how to compare quotes from different providers to get the best value. Whether you’re a general contractor, a specialty trade, or an independent subcontractor, you’ll find practical tips for budgeting and securing the right protection for your unique needs.

Factors Affecting Contractor Insurance Cost

Various factors affect the cost of Contractor insurance, including the type of policy. The following are some of the factors that go into determining policy premiums.

Business Size and Type

The size and type of your contracting business, for example, play a role in determining General Liability and Workers’ Compensation premiums. For instance, your trade, payroll, subcontractor costs, and gross receipts impact the cost of General Liability insurance.

Among the key factors that go into Workers’ Comp costs are the number of employees and payroll amount. Also, higher-hazard construction businesses, such as roofing, will pay more.

Coverage Limits and Options

The policy limits/coverage amount you choose will also impact the cost of insurance. Higher Liability limits will cost more, as they provide more coverage in the event of a loss. Your policy deductible amounts also affect the premiums you pay.

Some policies offer coverage options, and your premium may change depending on your choice. For example, a Contractors Tools & Equipment policy can be written with replacement cost coverage, which is a predetermined amount that determines the value of tools and equipment. This is the amount an insurance company will pay in the event of a covered loss. Or, it can be written on an actual cash value basis, which pays for damaged or stolen property at depreciated value. The premium amounts will differ, depending on which type of policy you choose.

Claims History and Risk Profile

Your claims or loss history impacts your premiums as well. Typically, if you have no claims, you will pay less for coverage, depending on the policy type. Insurance companies assess your risk profile, so taking measures to reduce losses lowers costs.

Industry and Location

The work you perform and the trade you specialize in directly affect your exposure to risk and the level of protection you need. For example, HVAC technicians, electricians, painters, and plumbers each face unique hazards and coverage requirements that insurers consider when pricing Contractor insurance. Workers’ Compensation, for example, takes into account how a business’s loss history compares with other like businesses in the same industry.

Where you operate can impact how much you'll pay for Contractor insurance. Insurers consider local laws, accident rates, and the cost of doing business in the area. Contractors in cities with high litigation rates might face increased Liability insurance costs, for example.

Contractor Insurance Pricing: What to Expect

Contractor insurance isn’t a one-size-fits-all program. Insurance companies evaluate each business based on the type of work performed, the size of the operation, and the level of risk involved. A contractor’s insurance program may include several coverages, such as General Liability, Workers’ Compensation, or Contractors Tools and Equipment, and each one is rated differently depending on exposure and job-specific hazards. Insurers look closely at business operations and industry specialization to determine appropriate coverage and protection.

How to Get Accurate Contractor Insurance Quotes

CCIS can provide you with a quote for various Contractor insurance policies, including General Liability, Workers’ Compensation, and Contractors Tools and Equipment. We have online quote forms that are easy to complete for responsive quotes.

Information Needed for a Quote

For a General Liability quote, you need to provide basic business details, such as business name, location, and years in operation; the type of contracting work you perform; project types or trades; annual revenue; payroll; number of employees; and subs.

For a Workers’ Comp quote, the basic info required includes: business name and contact information, number of employees/job roles, estimated annual payroll by class of worker, Federal Tax ID (if applicable), and current or prior coverage history.

For a Contractors Tools & Equipment quote, the info required includes business name and contact, list of equipment and tools to insure, estimated total value of items, storage and security details, and any previous losses or claims.

Comparing Contractor Insurance Quotes Online

Work with an experienced construction insurance specialist with access to major insurance companies for competitive rates. CCIS is that specialist. We specialize in Contractor Bonds and Contractor insurance in Arizona, California, Nevada, Oregon, and Washington, and can provide you with online quotes.

Tips to Save on Contractor Insurance Cost

To help save on contractor insurance costs, consider the following tips:

• Review your limits and deductibles to ensure they align with the risk you can afford if you have a loss. For example, you can raise your deductible and share in more of the cost of a claim, which will help you save premium dollars. However, remember that you will pay more out of pocket for a covered loss, so weigh carefully what is best for your operation.
• Lower your claim risk. Implement robust loss-control, safety, and risk-management measures across your operation to mitigate potential claims. Follow best practices and train your employees in workplace safety. Keep equipment properly maintained to prevent breakdowns and accidents. Use clear contracts and proper documentation to help reduce disputes and claims.
• Review your policies regularly. As your business grows, shifts in operations, payroll, or subcontractor use may mean you’re paying for coverage you no longer need or missing protection you should have.

*NOTE: The insuring agreement in a policy sets out the covered perils, assumed risks, and nature of coverage that the insurance company provides to its insured in exchange for the premiums paid. Thus, the terms and conditions of the policy will dictate whether coverage exists and the nature of any potential benefits.