The cost of construction insurance varies for every policyholder, and it depends on a variety of factors. The only way to determine the exact premium you will pay for your construction insurance policy is to discuss your coverage needs with an insurance agent.
However, it is helpful to have a general understanding of the average premium that policyholders pay for their construction insurance. This review breaks down the costs of construction insurance based on the specific types of coverages that are included in your policy.
What Factors Affect The Cost of Construction Insurance?
There are a range of factors insurance providers may look at when determining the cost of a policy. Ultimately, the more at risk the insurance company feels the policyholder is based on their claims history, specific risks, size of projects, etc., the more the policy is likely to cost.
The included coverages also play a major role in the overall final cost of the policy. For example, policyholders that require umbrella insurance to protect themselves from the risks associated with larger construction projects are likely to pay more than those who work primarily on small to mid-sized construction projects.
How Much Do Construction Insurance Policies Cost?
There are a variety of additional coverages you may benefit from as well. However, the primary construction insurance coverages that contractors need are general liability, worker’s compensation, commercial auto, and professional liability. The following is a detailed breakdown of the costs associated with each coverage.
General Liability Insurance Cost
General liability insurance protects you against third-party injuries and property damage. For example, if a member of your construction crew damages the foundation of a home you are working on, then the liability insurance should cover the costs associated with the damage.
The cost of general liability insurance depends on the limits placed upon the coverage and the policyholder’s previous claims history, among other potential considerations. However, the average monthly premium cost for general liability insurance for construction professionals is between $80 and $100, or approximately $1,000 to $1,200 per year. The deductible cost is typically around $500, and the coverage limit is generally between $500,000 and $1 million.
Worker’s Compensation Cost
Worker’s compensation protects you and your employees financially if one or more of the workers are injured while on the job. Since physical injuries related to construction accidents are more common than injuries in other industries, worker’s compensation is essential for construction contractors. This insurance policy covers the costs associated with medical costs, legal fees, and lost wages.
The average cost of worker’s compensation is between $250 and $300 per month. It is required by law in nearly every state inside the U.S. Of course, the exact cost for your specific needs may look much different depending on the number of employees you have, potential injury risks, and more.
Commercial Auto Insurance Cost
Commercial auto insurance is required for any construction professional that uses a vehicle for commercial purposes. This policy covers the costs associated with auto accidents, vehicle theft, property damage caused by the commercial vehicle(s), and non-accident-related damage to the covered vehicles (i.e. weather damage, vandalism).
The cost of commercial auto insurance varies widely based on the types and number of vehicles that are covered by the policy. However, the average cost of commercial auto insurance is between $150 and $200 per month. The most common policy limit is $1 million.
Errors and Omissions (E&O) Insurance Cost
TErrors and omissions insurance, also called E&O insurance or professional liability insurance, covers the policyholder from claims of negligence and incomplete or unsatisfactory work. These claims can lead to expensive legal fees and settlement costs that are difficult or not impossible for many contractors to cover out of pocket. Errors and omissions insurance mitigates this financial risk for the policyholder. he good news is errors and omissions insurance is highly affordable.
The average cost is between $40 and $80 per month. The coverage limit is typically around $300,000, and the deductible is generally between $2,000 and $5,000. Of course, as is the case with all types of coverages, the exact price of errors and omissions insurance for construction professionals can have a wide cost variation depending on the contractor’s specific needs, preferences and risks.
Contact JMG Insurance Agency for a Construction Insurance Quote
Do you have additional questions or concerns about your construction insurance needs? If so, then contact our team today. We can help you determine what your policy needs are and provide you with a quote based on your coverage needs and preferences. We take great pride in helping our policyholders establish more financial stability by reducing their overall financial risks related to legal fees, medical expenses, damage repair and replacement, and more.