Find insurance quotes for excavation contractors
Save money by comparing free quotes from trusted providers.
Choose from the nation's best insurance providers
How much does insurance cost for excavation and grading contractors?
Excavation business insurance costs depend on the type of policy, coverage limits, deductibles, and factors such as your business's location and number of employees. Save money on business insurance by comparing quotes from different providers with Insureon.
Top business insurance policies for excavation contractors and their cost
Here are the top policies purchased by excavation contractors and their average monthly cost:
- General liability insurance: $127 per month
- Business owner's policy (BOP): $98 per month
- Workers' compensation insurance: $396 per month
- Commercial auto insurance: $220 per month
- Contractor's tools and equipment insurance: $53 per month
- Professional liability insurance: $74 per month
- Commercial umbrella insurance: $83 per month
- Builder's risk insurance: $105 per month
- Surety bonds: $8 per month
Our figures are sourced from the median cost of policies for excavation contractors who apply for quotes with Insureon. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
General liability insurance
Excavation contractors pay an average of $127 per month, or $1,522 annually, for general liability insurance, sometimes called public liability insurance. Some excavation businesses need proof of insurance for this policy to sign a commercial lease or a client contract.
General liability insurance provides financial protection against common lawsuits from customers. It covers costs if someone sues your business over a bodily injury, property damage, or copyright infringement.
This is the average policy for excavation contractors who buy from Insureon:
Premium: $127 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500
The cost of a general liability insurance policy depends on factors such as the coverage limits you choose, the size of your business, the amount of foot traffic you have, and any subcontractors or additional insured endorsements.
Learn more about how your premium is calculated and how to save money on your general liability policy.
Business owner's policy
Construction businesses and contractors pay an average of $98 per month for a business owner's policy, or $1,173 annually.
A BOP is an insurance package that bundles two important types of coverage at a discount. It includes general liability coverage to protect against common lawsuits, and commercial property insurance to cover vandalism, theft, and property damage.
This is the average business owner's policy for a construction contractor who buys from Insureon:
Premium: $98 per month
Policy limits: $1 million per occurrence; $2 million aggregate
If you're wondering why a BOP costs less on average than general liability insurance, that's likely because only small, low-risk businesses qualify for a BOP.
The cost of a business owner's policy depends on factors such as the insurance options you choose, the size of your business, the amount of foot traffic you have, and the value of your business property.
Workers’ compensation insurance
Excavation companies pay an average of $396 per month, or $4,747 per year, for workers’ compensation insurance.
Workers' comp helps pay for medical costs from work-related injuries and illnesses. Most policies include employer's liability insurance, which covers the cost of lawsuits related to workplace injuries.
There's usually no limit to how much a workers' comp policy can pay for employee benefits, though it depends on state laws.
The cost of workers' compensation insurance depends on factors such as the number of employees you have and the type of work they do. Learn more about how workers' comp costs are calculated and how to save money on your policy.
Commercial auto insurance
Excavation contractors pay an average of $220 per month, or $2,644 annually, for commercial auto insurance.
Most states require this type of insurance for vehicles owned by a business. For personal, rented, and leased vehicles used by your business, look to hired and non-owned auto insurance (HNOA) instead.
A commercial auto policy provides financial protection in the event of an accident involving your business vehicle. It can help pay for property damage, medical expenses, and legal defense costs.
If you need heavy equipment insurance for vehicles like backhoes and bulldozers, you can often add a mobile equipment endorsement to your auto insurance coverage.
The cost of a commercial auto policy depends on your coverage needs, the value of the vehicle, and your insurance claims history. Learn how insurers calculate your premium and how to save money on your commercial auto policy.
Get free insurance quotes for excavation contractors from top U.S. providers
Contractor’s tools and equipment insurance
Excavation contractors pay an average of $53 per month for contractor’s tools and equipment insurance, or $632 annually.
A form of inland marine insurance, this policy covers the repair or replacement of mobile tools and equipment that's damaged or stolen. It typically covers newer items valued at less than $10,000 that excavation contractors bring to jobsites.
You may need additional property coverage for heavy machinery or other expensive equipment brought to construction sites.
The cost of contractor's tools and equipment coverage depends on the value of your tools and equipment and the type of work you do.
Professional liability insurance
Construction businesses and contractors pay an average of $74 per month, or $886 per year, for professional liability insurance. Excavation contractors can often bundle this coverage with general liability insurance for a discount, at a combined average of $112 per month.
Professional liability insurance, also known as errors and omissions insurance (E&O), protects excavation contractors from financial losses related to accusations of negligence or substandard work. It would help pay for attorney's fees and other legal costs if a client sues due to a budget overrun, unexpected delay, or breach of contract.
This is the average insurance coverage for construction professionals who buy from Insureon:
Premium: $74 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,250
The cost of professional liability insurance depends on factors such as the coverage limits you choose, the size of your business, and the excavation services you offer. Find out how insurers set professional liability premiums and how to save money on your policy.
Commercial umbrella insurance
Excavation contractors pay an average of $83 per month, or $1,000 annually, for commercial umbrella insurance. You can buy this policy to boost the limits of your general liability, commercial auto, or employer's liability insurance.
When the underlying policy reaches its limit, commercial umbrella insurance activates to cover any costs over that limit.
The cost of commercial umbrella insurance depends primarily on the amount of coverage you purchase.
Builder's risk insurance
Businesses in the construction industry pay an average of $105 per month, or $1,259 annually, for builder's risk insurance. This policy is sometimes called course of construction insurance.
Builder's risk insurance provides coverage for structures under construction. It will help pay for fires, vandalism, and other types of damage.
The cost of builder's risk insurance depends on the value of the structure, including materials and labor.
Surety bonds
Excavation contractors and businesses pay an average of $8 per month, or $100 per year, for a surety bond.
A surety bond reimburses your client if you're unable to fulfill the terms of a contract or other agreement. You may need a surety bond to get a license or permit for certain types of excavation work, such as grading.
The cost of a surety bond primarily depends on the size of the bond.
Key factors influencing policy costs
Your insurance provider calculates your excavation insurance premiums based on several factors, including:
- Types of coverage: Some policies are required before excavation and grading contractors can start work on a project. These required policies are often needed to cover more expensive accidents and lawsuits, which tend to cost more than basic coverages.
- Services offered: High-risk or deeper excavation projects, such as those that use heavy machinery, will have more costly premiums than smaller projects with less exposure to property damage or injury risks.
- Business size: The more employees or subcontractors that are on staff, the more opportunities there are for accidents to happen or for potential damage to occur to someone else's property.
- Annual revenue and payroll: The more your excavation and grading business makes in a year and the more you pay your employees or subcontractors, the higher your premium will cost. That’s because increased revenue and payroll mean a greater exposure to potential risks on the job.
- Business equipment and assets: Higher-value items are more likely to result in more expensive premiums than lower-cost items. Items that are used more frequently also tend to cost more to cover than infrequently used items.
- Years of experience: Excavation and grading contractors with more years of experience will see lower premiums than newer businesses due to a lower risk of claims occurring.
- Location: Excavation businesses that perform work in areas prone to natural disasters, increased foot traffic, or high crime rates may have to pay more costly premiums than those with jobs located in areas where these factors are less present.
- Coverage limits and deductibles: Higher coverage limits and lower deductibles will typically increase premium costs, while lower limits and a higher deductible can help keep insurance rates low.
- Claims history: An excavation and grading contractor with a lengthy list of previous insurance claims will likely pay more for insurance than a company with no claims history.
How do I get excavation contractor insurance?
Insureon can help you find affordable excavation contractor insurance in three easy steps:
- Fill out a free online application with details about your business.
- Compare custom quotes from top-rated U.S. providers.
- Select a policy and pay the premium to begin coverage.
A licensed agent will help make sure your insurance matches your business risks, budget, and state requirements. Once you've bought a policy, you can download a certificate of insurance (COI) for proof of coverage. Most small businesses can get covered within 24 hours of applying for quotes.
What our customers are saying
Updated: October 22, 2025
Want free expert advice right in your inbox?
By entering your email address and subscribing, you agree to our Terms of Use and Privacy Policy
EXPLORE ON INSUREON
Contractors pollution liability insuranceWhat types of construction insurance do you need?How a builder’s risk insurance policy can protect your businessConstruction insurance vs. surety bond: What’s the difference?Construction insurance for 3 common contractor claimsWhat is a construction defect and are you liable for it?
SHARE THIS ARTICLE
