How Contractors Insurance is Priced?

Contractors negotiate insurance pricing at construction or roofing siteAt BearStar Insurance Services, we understand it can be confusing to understand what contractors insurance you need in California to make sure you have the right coverage. But it can equally be hard to discern the costs of contractors’ insurance. That’s why we think it’s important to take a look at some key types of contractors insurance and help you better understand how contractors insurance is priced. So, let’s take a closer look.

Workers’ Compensation Insurance

Workers’ Compensation Insurance is important for your contractor business. It covers medical bills for worker injury or illness and lost wages due to an injury or accident. In California, a contractor with one or more employees is required by law to carry workers’ compensation insurance. Because of the basic risks involved, roofing contractors are required by law to either carry workers’ compensation insurance or have a valid Certification of Self-Insurance.

For Workers’ Compensation Insurance, policy premium rates range from 3% to 25% of the total payroll amount, with $25,000 as a payroll example, the cost would be from $70 a month at the low end for an Electrical (C10) classification up to $520 a month for a General (B) classification. On an annual basis, the average cost is $3,120. The price of your contractor workers’ compensation depends on the business location, payroll amount, classification of workers, and your company’s prior work-related injury history.

Contractor General Liability Insurance

Contractor General Liability Insurance is also one of the most important types of insurance coverage for your general contractor business. It protects your business from inherent risks of interacting with third parties, such as injury, property damage, product/completed operations, and personal and advertising injury. Typically it ranges from $796-$1,230 per year. However, cost depends on where you live, the size of your crew, if a subcontractor is needed, and coverage limits. A coverage limit of $2-million would be higher than $1-million. The higher your coverage is the more protection it affords your contractor business.

Tools and Equipment Coverage

Contractor’s Tools and Equipment Coverage is another type of insurance for contractors that covers your valuable tools and equipment. Not only does it pay for stolen tools and equipment from a job site, it also covers damage caused by vandalism or work incidents. Our Contractors Tools and Equipment Coverage is often bundled with contractor general liability insurance. Depending on your deductible, it can range from $250 to $1,000 per year.

Commercial Vehicle Insurance

Commercial Vehicle Insurance is needed if you own and operate vehicles as part of your business. It’s required by California state law, whether you have one vehicle or an entire fleet. The average annual cost for commercial vehicle insurance ranges from $800 to $2,400, and depends on your driving record, the value of the vehicle, and the cost to repair or replace, as well as distances driven.

Make Sure You Have the Right Contractors Insurance at the Right Price

At BearStar Insurance Services, our products and services cater to the needs of contractors, including contractor-specific coverage options for general liability insurance, commercial auto insurance, workers’ compensation, and surety bonds to guarantee bids or to confirm the satisfactory completion of a project.

Leveraging over 100 years of experience, BearStar Insurance agents have a deep understanding of what California business owners need – and don’t need – when it comes to their insurance coverage. From general business and workers’ compensation to independent contractors and cybersecurity, we work with some of the best carriers in the industry to provide you with custom-fitted, comprehensive protection at the best possible price. We value the relationships we build with our clients; fill out this form to get a quote or call us today at 949-979-5251 to speak with your local agent.