How much does insurance cost for construction project managers?
The cost of construction project manager insurance depends on several factors, such as the types of policies you purchase, your location, and your business risks. Save money on small business insurance by comparing quotes from different providers with Insureon.
Average construction project manager insurance costs for top policies
Here are the top insurance policies purchased by construction project managers and their average monthly costs:
- Professional liability insurance: $142 per month
- General liability insurance: $51 per month
- Business owner's policy: $67 per month
- Workers' compensation insurance: $50 per month
- Commercial auto insurance: $230 per month
- Cyber insurance: $81 per month
Our figures are sourced from the median cost of policies for construction project managers 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.
Professional liability insurance
Professional liability insurance, also called errors and omissions insurance (E&O insurance) or professional indemnity insurance, costs an average of $142 per month, or $1,700 annually, for construction project managers.
This policy covers the cost of client lawsuits over claims that your work was unsatisfactory, negligent, late, or never completed.
For instance, if a project delay costs a client money, a professional liability insurance policy would cover your legal defense costs, settlement, and other financial losses if the client sued over professional negligence.
Below is the average professional indemnity insurance policy for construction project managers who buy from Insureon:
Insurance premium: $142 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $2,500
Several factors influence the cost of professional liability insurance, including the type of business you have, your claims history, and the policy limits you choose.
As with other types of insurance, you can save money on professional liability coverage by choosing lower limits or a higher deductible.
Reducing your risks also helps you avoid claims and keep your premium low. This includes clear communication with clients and thorough documentation of all communications and agreements.
General liability insurance
Construction project managers pay an average of $51 per month, or $606 annually, for general liability insurance. This policy is sometimes called public liability insurance.
General liability insurance covers common third-party risks at construction project management businesses, such as a client who slips on a wet floor at your office and suffers a bodily injury, or accidental damage to a client's property.
For example, if you drop and break a client's smartphone while going over project deadlines with them, general liability insurance coverage would pay for the repair costs or legal fees if the client sues over property damage.
It also helps pay for attorney's fees and other legal expenses if someone sues your business over copyright infringement or other advertising injuries, including defamation.
Below is the average general liability policy for construction project managers who buy from Insureon:
Insurance premium: $51 per month
Policy limits: $1 million per occurrence; $2 million aggregate
The per-occurrence limit is the maximum your insurer will pay for a single covered incident, while the aggregate limit is the most the insurer will pay for all claims during the policy period, typically one year.
General liability insurance costs depend on factors such as the coverage limits and deductible you choose, the types of professional services you offer, your business income, and any additional insured endorsements you select.
Learn more about how your insurance premium is calculated and how to save money on your general liability coverage.
Business owner’s policy
Building design companies, including construction project management businesses, pay an average of $67 per month, or $804 annually, for a business owner’s policy.
A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.
A BOP protects against customer injuries, property damage, and vandalism. It also covers damage to your construction project management equipment, as well as your office building. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents for those who rent or own an office.
This is the average BOP for construction project managers who buy from Insureon:
Insurance premium: $67 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500
Small, low-risk construction project management companies are often eligible for a business owner's policy.
Construction project managers may see higher costs if they choose to add endorsements to their policy. Insurance endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help pay for lost income if a fire or power outage forces your business operations to cease for an extended period of time.
The cost of a business owner's policy is based on a number of factors, including the value of your business property, where you are located, the types of projects you take on, the number of employees you have, and your specialty.
Workers’ compensation insurance
Building design businesses, including construction project managers, pay an average of $50 per month, or $601 annually, for workers’ compensation insurance.
This policy covers medical expenses and lost wages related to employee injuries. It usually includes employer's liability insurance to protect against lawsuits from injured workers.
Businesses with employees typically must purchase workers' comp to comply with state requirements and avoid penalties. For example, all construction project management businesses in California, Pennsylvania, and New York must carry workers' comp if they have one or more employees. Florida businesses need coverage when they have four or more employees, and coverage is optional in Texas.
Since health insurance plans can deny claims for injuries related to your job, workers' comp coverage is also recommended for independent contractors as a financial safety net and for peace of mind.
The cost of workers' comp depends on several factors, primarily the number of employees you have and their occupational risks. You can save money on workers' comp coverage by classifying your employees correctly and implementing a risk management plan to avoid work-related injuries and subsequent claims.
Commercial auto insurance
Building design professionals, including construction project managers, pay an average of $230 per month, or $2,755 annually, for commercial auto insurance.
This type of insurance pays for legal costs and medical bills if your company vehicle injures someone or damages their property in an accident. It can also cover vehicle theft, vandalism, and weather damage.
Most states require commercial auto insurance for vehicles owned by a construction project management business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.
The cost of commercial auto insurance depends on several factors, including your policy limits, the coverage options you choose (e.g., additional insured endorsements), the number and value of your vehicles, and the driving records of anyone permitted to drive.
Cyber insurance
Building design firms, including construction project management businesses, pay an average of $81 per month, or $975 annually, for cyber insurance. This policy is also called cyber liability insurance or cybersecurity insurance.
Cyber insurance helps construction project managers and other building design professionals recover financially after a cyberattack or data breach. It can cover data breach investigations, cyber extortion payments, and costs related to complying with your state's data breach laws.
A cyber liability insurance policy is especially crucial for construction project management companies that store sensitive client information, such as credit card numbers, phone numbers, and email addresses.
The cost of cyber insurance and the coverage you need depend on the amount of sensitive information you handle at your construction project management firm.
How are construction project manager insurance costs calculated?
Construction project manager business insurance coverage costs are determined by several factors. While underwriting your policy, insurance companies will consider the following when calculating insurance rates:
- Types of professional services offered: Project management companies may see elevated premiums if they offer higher risk services, such as engineering or architectural services, compared to businesses that only provide administrative project coordination.
- Business property and equipment: Project managers that operate with higher-value vehicles, tools, or equipment are likely to see more expensive premiums. Also, any items that are frequently used could cost more to insure than items that are used less often.
- Annual revenue and payroll: The more your construction project management firm 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 often indicate larger projects, more clients, and greater exposure to possible claims.
- Location: If your project management business operates in an area that is more prone to natural disasters, increased foot traffic, or high crime rates, you may have to pay higher insurance costs than a project manager located in an area where these factors are less present. Also, your state's litigation trends and local regulations can affect costs.
- Years of experience: Construction project management firms and professionals with an established track record may be eligible for lower insurance rates than newer businesses with limited operating history.
- Type of projects: Insurance companies take into account the types of projects you take on, including their complexity and size. A project management business that works on high-risk, larger, or more specialized projects, such as luxury commercial developments, may see increased premiums compared to one that only takes on smaller and less risky projects, like small residential projects.
- Claims history: A project management firm with a lengthy list of previous insurance claims will likely pay more for insurance than one with no claims history.
- Types of coverage: For professional liability coverage, the type of policy you choose can influence your premium. Most professional liability policies for project managers are written on a claims-made basis, which generally start with lower premiums that then increase during the first few years of continuous coverage. While occurrence-based policies are less common for professional liability insurance, they may be available for other types of business insurance.
- Number of employees: The more employees and subcontractors your project management business has, the greater the potential for mistakes or errors, property damage, and liability claims.
- Coverage limits and deductibles: Project management companies with higher coverage limits and lower deductibles on their insurance policies will typically see increased premium costs, while lower limits and a higher deductible can help keep their rates lower. If you want additional coverage beyond your policy limits for extra protection, consider purchasing commercial umbrella insurance or excess liability insurance.
How do I get construction project management insurance?
Insureon can help construction project managers, commercial builders, and other building design professionals find affordable insurance coverage in three easy steps:
- Fill out a free online application with details about your business.
- Compare custom quotes from top-rated U.S. insurance companies.
- Select a policy and pay the premium to begin coverage.
You can consult a licensed insurance agent for questions about your risks, state insurance requirements, and the right construction management insurance for your needs.
Once you've selected and purchased the policies you need, you can download a certificate of insurance (COI) for proof of coverage. Most small business owners can get coverage and proof of insurance within 24 hours of applying for quotes.
What our customers are saying
The average costs on this page were derived from our data on small business owners in the construction project management field who purchased policies through Insureon. Most of our customers have less than five employees, annual revenue ranging from around $50,000 to more than $200,000, and five years or less in business.
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