Many variables contribute to the cost of contractor and construction business insurance, including your type of work and where you operate. Cost estimates are sourced from policies purchased by Insureon customers.
General liability insurance costs for contractors and construction businesses
Contractors and construction businesses pay a median premium of less than $70 per month, or $825 per year, for general liability insurance. This policy provides protection for third-party bodily injuries and property damage, along with advertising injuries.
Insureon’s licensed agents typically recommend a business owner’s policy over a standalone general liability policy. A BOP combines general liability insurance with commercial property insurance to protect a contractor’s business property, and costs less than purchasing each policy separately.
Your level of risk affects general liability costs
Among construction and contracting businesses that purchase general liability with Insureon, 24% pay less than $600 per year and 48% pay between $600 and $1,200 per year. High-risk businesses such as roofers tend to pay more for general liability.
Common general liability policy limits
Policy limits determine how much your insurer will pay on covered claims. A per-occurrence limit is the maximum your insurer will pay for a single incident, while an aggregate limit is the maximum your insurer will pay on any claims during your policy period, typically one year. Higher limits cost more – and provide better coverage.
Most contractors and construction businesses (98%) choose general liability policies with a $1 million per-occurrence limit and a $2 million aggregate limit. As your small business grows, you may need to expand your policy limits.
Your business type affects the cost of general liability
Businesses with a higher risk of customer injuries or damage to customer property, such as roofers, typically pay more for general liability insurance than a company with lower risk, such as a locksmith. Your industry risk, building maintenance, years in operation, and your location will also affect your premium.
The annual median cost for a roofer is $3,590, while the median for a locksmith is $406 – or less than $35 a month. As you can see, the cost can vary significantly across professions.
Workers’ compensation insurance costs for contractors and construction businesses
To meet your state’s requirements and avoid penalties, construction and contracting businesses with employees typically must purchase workers’ compensation insurance. This policy helps cover medical bills and partial lost wages when an employee suffers a work-related injury or illness. With a median premium of $275 per month, or $3,295 per year for construction and contracting businesses, policy cost is determined by your number of employees and their occupational risk, among other factors.
The cost of workers’ compensation insurance depends on the number of employees
Among construction and contracting businesses that purchase workers’ compensation insurance with Insureon, 35% pay less than $2,000 per year and 23% pay between $2,000 and $4,000 per year. The cost varies based on the number of employees and the level of risk involved with their jobs, among other factors.
Commercial auto insurance costs for contractors and construction businesses
Construction and contracting businesses pay a median premium of about $150 per month, or $1,830 per year, for commercial auto insurance. This policy can pay for third-party property damage and medical bills in an accident, along with vehicle damage caused by theft, weather, and vandalism.
Businesses with company-owned vehicles, such as concrete trucks and snow plows, must purchase commercial auto insurance. The cost will vary depending on the type and number of company vehicles, and your unique business risks.
Commercial auto insurance limits
Most construction and contracting businesses choose a commercial auto policy with a $1 million generic limit.
Contractor’s tools and equipment insurance costs
Construction and contracting businesses pay a median premium of less than $15 per month, or $170 per year, for contractor’s tools and equipment insurance.
A form of inland marine insurance, this policy helps pay for repair or replacement of a contractor’s lost, stolen, or damaged tools and equipment. The cost varies depending on the value of your items.
Contractor’s tools and equipment limits
Most construction and contracting businesses choose contractor’s tools and equipment policies with a $5,000 generic limit.
Professional liability insurance costs for contractors and construction businesses
Construction and contracting professionals pay a median premium of about $85 per month, or $1,000 per year, for professional liability insurance. Also known as errors and omissions insurance, this policy offers critical coverage for contractors, including legal fees related to professional mistakes and accusations of negligence.
Professional liability insurance costs depend on your risk
Among contractors and construction businesses that purchase professional liability insurance with Insureon, 36% pay less than $600 per year and 27% pay between $600 and $1,200 per year. The cost increases depending on the risk of a business being sued over a professional mistake.
Professional liability policy limits
Most construction and contracting businesses choose professional liability policies with a $1 million per-occurrence limit and a $1 million aggregate limit.
Explore insurance costs for your business
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Insureon’s construction and contracting business insurance agents work with top-rated U.S. carriers to find affordable coverage that fits your business. Apply today to compare multiple quotes with one free online application. Work with an account manager specializing in the unique risks of general contractors, electricians, and roofers.