How Much Does General Contractors Insurance Cost??
General contractors’ insurance typically references general liability insurance tailored for contractors. General liability insurance covers bodily injury and property damage that arise out of accidents and nonprofessional negligence.
On average, contractors’ insurance is around $1,090 a year, which is about $90 a month. This depends on many factors, however.
Your location can change the cost of your contractors’ insurance. This is in part due to state rates and the history of claims in your area. Medical expenses in the area can also influence your rates, as general liability also helps with medical bills of victims of bodily injury.
Size of the Business
Larger businesses tend to need higher rates of liability insurance due to the wider range of clients and projects. The larger your business, the more you may pay for general liability insurance.
The longer history of claims on a business, the higher cost of general liability insurance. An insurance agency sees your claims history as an example of how likely you are to file another insurance claim in the future. Since insurance agencies don’t want to have to pay out compensation, they charge higher premiums to make up for the risk of a claim.
Most general liability insurance policies go by millions, starting at $1 million per policy term. Higher coverage limits mean a better chance of being covered for a lawsuit, but it also means more expensive monthly premiums. Carefully consider the insurance needs of your business. No one contractor is the same, and your insurance needs may be different than your neighbor’s.
A business owner’s personal credit score can be used to determine contractor’s insurance rates. This is because your credit score is an example of how reliable you are in paying premiums in full and on time. Contractors with low credit scores tend to pay more for liability insurance than those with good credit score. You can build credit by paying off debts and loans, as well as setting up an auto draft for your bills so that you never miss a payment.
Rates also differ if you choose to bundle your insurance. Many business owners bundle their general liability insurance with commercial property coverage into a business owners’ policy (BOP). A BOP is slightly more expensive than general liability on its own, but it allows you to combine coverages into a single comprehensive policy for less overall.