What Is The Cheapest Contractor Insurance?

 

If you're a contractor, insurance should be at the top of your list. Without proper coverage, one lawsuit could put you out of business.

Types of Insurance for Contractors

The three main types of insurance for contractors are:

1. Liability Insurance

Liability insurance protects you in case a client sues for property damage or injuries. It covers the costs of legal defense and any settlements or judgments.

2. Workers' Compensation Insurance

Workers' compensation insurance pays for medical bills and lost wages for any employees who are injured on the job. It's required by law for any contractor with employees. Rates vary significantly based on the type of work, so shop around at different companies.

3. Commercial Auto Insurance

Commercial auto insurance covers vehicles used for business. It's important if you drive to job sites or haul heavy equipment. Personal auto policies typically don't provide enough coverage for contractor needs.

READ ALSO: What's the Best CRM for Insurance Agents? Our Top Picks

How to Find The Cheapest Contractor Insurance Coverage

Here are some tips to find affordable contractor insurance:

1. Look for group plans

Check with contractor associations or building trade groups you belong to. Many offer insurance plans with lower premiums for members. You may be able to save 10-15% over an individual policy.

2. Raise your deductibles

The higher your deductibles, the lower your premiums will be. Consider raising your deductibles for general liability, auto, and workers comp policies. Make sure you can afford the higher out-of-pocket costs if a claim is filed.

3. Compare many quotes

Don’t just go with the first insurance agent or company you talk to. Compare quotes from multiple providers to find the best deal. Provide the same coverage details to get an apples-to-apples comparison.

4. Ask about discounts

Inquire about ways to lower your premiums like bundling multiple policies (general liability, auto, etc.), safety program credits, continuing education credits, and loyalty discounts for long-term customers. Every dollar in discounts helps.

5. Review coverage needs

As your business changes, your insurance needs may change too. Look at your current coverage and limits to make sure they still meet your needs. You don’t want to be underinsured, but you also don’t want to pay for coverage you don’t truly need.

Consider higher deductibles for lower premiums, but make sure you can afford the out-of-pocket costs. Compare many quotes and check for available discounts to find the most affordable coverage that properly protects your contracting business.

READ ALSO: Restaurant Insurance Quotes: How to Get the Best Deal

Tips for Getting the Cheapest Contractor Insurance Rates

To get the lowest premiums possible for contractor insurance, here are some tips to keep in mind:

1. Choose a Higher Deductible

The deductible is the amount you have to pay out of pocket before your insurance kicks in. Opting for a higher deductible, like $2,500 or $5,000 versus $500 or $1,000, will lower your premiums significantly.

Just make sure you have enough cash on hand in case you need to pay the deductible.

2. Bundle with Other Policies

If you have multiple insurance policies like commercial auto or worker's comp, see if you can bundle them together with your contractor insurance. Insurance companies often offer discounts of up to 20% for bundling multiple policies.

3. Improve Your Credit Score

In many states, insurance companies can consider your credit score when determining your premiums. The higher your score, the lower your rates may be. Check your credit report for any errors and take steps to improve your score before shopping for new coverage.

4. Reduce Coverage Levels

Evaluate how much coverage you truly need. For example, you may be able to lower limits on liability coverage or drop coverage for certain types of claims. But be very careful not to cut corners and leave yourself unprotected.

5. Compare Multiple Quotes

Shop around at different insurance companies, compare quotes, and see who offers the best deal. Some of the most affordable options for contractors include Hiscox, Next, Nationwide, and Travelers. You may be able to save hundreds per year by switching to a lower-cost provider.

6. Ask About Discounts

Finally, inquire about any discounts for contractors like safety program credits, membership in trade associations, loyalty, or group programs.

Conclusion

With the proper insurance in place, you'll have peace of mind that you, your employees, and your clients are protected. That's worth the investment for any successful contracting business.