Construction Business Insurance Cost: Essential Coverage for Contractors

Construction business insurance is a crucial investment for contractors, as it protects their livelihoods and helps them navigate unexpected events.

The average annual cost of construction business insurance can range from 1% to 5% of the company's annual revenue, depending on factors such as location and type of projects.

Contractors can expect to pay around $500 to $5,000 per year for liability insurance, which is the most common type of coverage.

Accidents and lawsuits can be devastating to a construction business, making insurance a necessary safeguard.

The cost of construction business insurance can be affected by factors such as the number of employees, type of equipment, and location of projects.

Business insurance can help you save money if there's an accident involving your business.

It's usually required before you can start working on projects for your clients, so having the right construction business insurance is crucial to getting started.

Having the right insurance can give you peace of mind, knowing you'll be covered if someone gets hurt or property is damaged while you and your team are on the clock.

If you're planning a construction project, you'll want to know what types of contractors need general liability insurance. General contractors, masonry contractors, concrete contractors, drywall contractors, excavation contractors, paving contractors, and permanent yard contractors all require it.

Some specific examples of contractors who need general liability insurance include roofers, carpenters, plumbers, welders, electricians, painters, landscapers, appliance repair technicians, home inspectors, and handypeople.

Debris removal businesses, snow and ice removal businesses, tree service businesses, and interior and exterior construction businesses also need general liability insurance to protect themselves and their clients.

Here are some examples of contractors who need general liability insurance:

You'll need construction business insurance to protect yourself and your business. This type of insurance can be purchased through a one-stop shop like NEXT Insurance, which offers an easy online platform to get the coverage you need at an affordable price.

To determine what type of insurance you need, consider your profession - general contractors, masonry contractors, and other types of contractors mentioned in the list below are often required to have general liability insurance.

Here are some types of contractors who typically need general liability insurance:

Having the right construction business insurance can help you save money if there's an accident involving your business.

Insurance companies view contractors with no claims history as lower risk, which can result in lower premiums.

This is because contractors with a clean claims history are seen as more reliable and less likely to file a claim.

Insurance premiums are directly tied to risk, so contractors with a history of claims are charged more.

On the other hand, contractors with no claims history are rewarded with lower premiums.

Insurance companies view a claims history as a key factor in determining premiums.

The cost of construction business insurance can be a significant expense, but it's essential to understand what factors affect it. Business location is a major factor in determining the cost of general liability insurance for contractors.

Your business's claims history is also taken into account, which is why it's so important to maintain a clean claims record. This can help you qualify for lower premiums.

Business size is another factor that affects the cost of general liability insurance. Larger businesses tend to pay more for insurance than smaller ones.

Policy limits are also a key consideration when it comes to the cost of general liability insurance. The higher the policy limits, the more expensive the insurance will be.

On average, you can expect to spend around $90 per month or $1090 per year on general liability coverage. This is according to HowMuch, a reliable source for insurance information.

Your annual revenue is also a factor that insurers may consider when calculating your insurance premiums. This can sometimes affect the cost of your insurance, but it's not always the case.

Construction businesses face unique risks, and having the right insurance coverage can help mitigate these risks. Professional liability insurance covers claims against your business for mistakes or oversights in performing a service.

If a client sues your general contracting company for missing the deadline on a construction project, your professional liability policy would cover legal and settlement costs. This can be a costly expense, but with the right insurance, you can protect your business from financial ruin.

Commercial auto insurance protects vehicles that you use in the course of doing business. If you’re backing up your electrician's van and collide with another driver, your commercial auto insurance will cover damage to the car and any injuries the driver receives.

Builder’s risk insurance covers damage or loss to buildings during construction or renovation as a result of fire, weather events, vandalism or other hazards. This type of insurance can be especially important for construction businesses that work on high-value projects.

Inland marine insurance covers business property while it is being transported, or while it is being stored by a third party. If you’re driving from one landscaping project to another and supplies are stolen from your truck while you’re stopped at a gas station, inland marine insurance will cover replacement costs.

Here are some key types of insurance to consider for your construction business: