Construction companies in the USA need insurance to operate safely and legally. Carriers provide the best protection through commercial construction insurance. In this construction insurance for dummies guide, you’ll learn how the policy works, the cost of premiums, and where to get it.
Commercial construction insurance is an insurance product carriers underwrite to protect construction companies against management risks, project site risks, employment risks, and third-party liability risks.
Construction insurance will help your construction company cover the cost of third-party and employee injuries without incurring losses. You can also use this to fund expenditures for lawsuits if your business is sued.
Having construction insurance also allows you to recoup losses if the construction materials and equipment become damaged or lost.
Your construction company might rent or lease equipment. And with no construction insurance coverage in place, no equipment rental or leasing business will work with you.
Last but not least, getting a construction insurance policy is a requirement to bid for and realize construction projects.
Get all the best quotes from leading providers in a click of a button!
There are two types of construction insurance-casualty and risk. Both can be further classified as:
General liability insurance
Employer’s liability insurance
Builders risk insurance
Commercial property insurance
Workers compensation insurance
Inland marine insurance
General liability insurance or commercial general liability insurance (CGL) provides protection if your construction business is responsible for the injuries or property damage of third parties. Construction general liability insurance is extremely useful if:
An employee hits someone while using an equipment at the construction site
Explosions or flames originate from the construction site and injures people or damages properties nearby
An inspector falls from a height, slips, or experiences any other accident and holds your construction company accountable
Now, let’s take a look at how general liability insurance functions:
If it’s liable for bodily injuries, your construction company can use general liability insurance to cover settlements and medical expenses of the claimant
General liability insurance for construction company will provide refunds if a third party files a property damage claim
General liability insurance covers administrative fees, attorney fees, court fees, investigation fees, and other legal expenses if a third party sues your construction company for property damage or bodily injuries
Carriers underwrite CGL construction insurance comprehensively. This means that it also provides a shield against other exposures. The following are additional coverages to general liability insurance:
Advertising injury coverage-General liability insurance with advertising injury coverage takes care of settlements or defense costs if your construction company committed or allegedly committed slander, libel, copyright infringement, and invasion of privacy
Contractual liability coverage-With contractual liability coverage included in its terms, general liability insurance covers indemnification for the liabilities your construction company assumes in a project contract
Non-owned/hired auto insurance-Indemnifies third parties and covers defense costs if a borrowed or hired dump truck, bulldozer, and other similar vehicles caused a vehicular accident
Now that you know how this construction casualty insurance works, let’s talk about the amount of coverage it provides.
General liability insurance for small construction businesses has a $1 million-$2 million per occurrence limit. Big construction companies, on the other hand, can get a general liability insurance with more than $5 million per occurrence limit.
Consider getting professional liability insurance for your construction company. This construction contractor insurance will cover costs if a claim is filed because your business caused economic or financial losses by:
Your construction company didn’t finish the project on time
Hired and assigned untrained workforce for a job
Failing to maintain construction equipment
Kept records poorly or lost them
Breach terms of the project contract
Divulged the confidential information of a client
So what particular costs are covered? This type of general construction insurance will indemnify the losses of the claimant. It will pay attorney fees, administrative costs, investigation fees, and other related costs if a lawsuit is filed against your construction company.
Professional liability insurance for construction businesses has a $1 million-$2 million minimum per occurrence limit. In case you need more coverage, carriers allow you to get a per occurrence limit of $5 million.
Most insurance companies offer occurrence-professional liability insurance to construction companies. When bought as an occurrence policy, this kind of construction industry insurance provides coverage regardless of when you decide to claim it. You can even use it even if its terms have expired, so long as the covered peril has happened while it's active.
Purchase excess liability insurance if you’re experiencing any of the following issues with your construction company’s professional liability or general liability insurance:
The limits stated in the terms of your general liability or professional liability insurance are lackluster
Your professional liability or general liability insurance has exhausted its limit after covering a claim
This construction business insurance provides extra limits so that your construction company’s general liability or commercial property insurance can still cover a claim even though they’ve been exhausted or can’t provide adequate coverage.
Remember that excess liability insurance acts as a backup. You can’t use this small construction business insurance to cover a claim. In fact, it’s impossible to have excess liability insurance if you don’t have general liability or professional liability insurance in the first place.
In most states, construction companies need to purchase construction surety bonds in order to get a building permit. Furthermore, some clients will also look for it before agreeing to the terms of the contract.
Regardless of where you choose to get it, a surety bond functions the same. It guarantees that, in case your construction company can’t finish the project because of an issue, the client receives indemnification for his or her losses.
Accidents always happen in construction work. Construction injuries cost the United States $50 billion per year, and it’s estimated that 16 construction workers experience injuries per week. The most common causes are:
Getting hit by falling objects such as beams, tools, etc.
Falling from a height
Electrocution due to poor electrical work or damaged insulation
Slip and fall
Being overrun by motorized construction equipment
Continuous repetitive movements
The law requires your construction company to provide compensation if an employee becomes injured. Workers' compensation insurance can help. Common injuries covered by this type of corporate construction insurance are:
The following are the costs covered by workers' compensation insurance if an employee sustains any of the injuries above:
Medical treatment/ambulance-Your construction company can use workers' compensation insurance to cover ambulance fees and emergency medical treatment if an employee becomes injured while working
Hospitalization-If an employee is admitted after getting injured, workers compensation insurance enables your construction company to provide compensation for hospital bills
Medication-Workers compensation insurance can cover the cost of medicines that will help an employee recover from a work-related injury
Rehabilitation-An employee covered by workers compensation insurance will receive aid in paying therapist fees and other rehabilitation expenses
Lost wages-Workers compensation insurance covers lost wages of an injured employee. The policy does this by providing a weekly allowance equal to two-thirds or 67% of the average weekly pay your construction company provides
Death benefits-Deaths are common in construction work. This is why workers' compensation insurance doesn’t only cover injuries but also the death of your employee. It will pay for funeral expenses and provide a financial assistance to dependents
Authorities will impose fines if your construction company operates without workers' compensation insurance. This can either be a fine, a stop-hold order, or a criminal charge punishable by 1-2 years imprisonment.
Employees not covered by workers 'compensation insurance can sue your company for negligence. That said, your construction business is vulnerable to employee lawsuits without this insurance for construction workers. It might even have difficulties in retaining talents.
Commercial property insurance allows your construction company to recover losses if its building, equipment, and other belongings become damaged or lost due to:
The limits of commercial property insurance vary depending on which carrier is underwriting it. Some insurance companies only allow the policy to give $25,000-$500,000 coverage. On the other hand, there are others that allow you to determine the limits yourself and make it possible for commercial property insurance to provide more than $1 million.
Consider getting directors and officers liability insurance if your construction company operates as a corporation led by directors and officers.
You can use this insurance to cover indemnification and defense costs if the officers and directors are sued for reasons related to their functions. Examples are:
Breach of fiduciary duty
Breach of confidentiality
This construction management insurance has a $1 million-$2 million limit. However, for adequate coverage, consider getting $5 million-$10 million from this policy.
A builders risk policy can be added to your commercial construction insurance. Also called building under construction insurance, this will recoup your losses if the construction project sustains damage due to:
Aside from the construction project itself, this type of building construction insurance also protects equipment, construction materials, and supplies.
Remember that this construction project insurance only provides protection during the course of the construction project. The policy ceases to work once the job is completed.
Construction risk insurance isn’t all-encompassing. There are perils that it can’t shield you against. Exclusions are:
Wear and tear
Government demolition orders
As said earlier, builders' risk insurance doesn’t provide help if an employee steals equipment and supplies at the construction site. To cover your company against losses when a worker commits such a crime, consider purchasing theft insurance.
So how can this type of construction site insurance help you? Theft insurance will recover losses if equipment and supplies got damaged or lost because an employee stole them. The limits of theft insurance for construction companies is $25,000-$100,000.
Employers liability insurance construction will cover defense costs and settlements if an employee who sustained a work-related injury sues your business for negligence. This has a $1 million per occurrence limit. Some insurance companies offer employer’s liability insurance as an add-on to workers' compensation insurance.
Your construction company is highly dependent on different equipment to complete tasks. You invested a lot in them. This is why insurance companies underwrite construction equipment insurance.
Construction equipment insurance helps you buy a new unit or provides an immediate replacement if tools and machines of your construction company sustain damaged or become lost due to:
Equipment usually covered by construction equipment insurance are safety devices, drills, hammers, saws, compressors, electric generators, pavers, rollers, and more. Motorized equipment (e.g. dump trucks and wheeled bulldozers) that can traverse public roads are excluded from the terms of the policy.
Suppose your contracting company is involved in using specialty building materials or non-standard construction. In that case, you may want to purchase this insurance for the duration of the job you’re working on. Non standard construction is defined as the use of building materials that aren’t common, such as:
Natural wood structures (think treehouses)
Non standard construction insurance provides protection in the event that a non standard building project sustains damage or causes third party bodily injuries or property damage
Home construction insurance is a specialty coverage that contractors and homeowners can use to cover houses being built. This is composed of third-party liability insurance construction, builders risk insurance, equipment insurance, and more.
A homeowner can add residential construction insurance coverage to their homeowner’s insurance at an additional price. This covers liabilities if third parties get hurt during the house’s construction.
Owner builder construction insurance is coverage for those who have their own construction project and want to get things done by themselves. This covers liability for the injuries or property damage of third parties. Coverage for construction site damage due to fire, theft, weather, and water is also included.
Building renovation insurance is a specialized coverage for building renovation projects. Inclusions to this insurance program are builders risk insurance, professional liability insurance, general liability insurance, and equipment insurance.
Note that the limits of the policies included in building renovation insurance are lower because renovation projects aren’t as costly as new construction projects. But still, carriers allow you to customize to enjoy increased limits.
Construction insurance cost will vary significantly from one customer to the next. Many factors affect the average cost of construction insurance such as:
The size of the project you’re working on
The value of the equipment being insured
The value of your tools and building materials
What type of coverage and policies you need
There are many ways for you to lessen construction company insurance cost such as:
Getting high deductibles
Ensuring that your employees are well-trained
Going for an annual one-time payment
Bundling one or more policies
Below, we’ll show you the average price for a general liability policy and workers’ comp. These are the two most common types of construction business insurance that all companies need, so we figured we would provide you with a handy chart of the average construction company insurance cost so you know what to expect.
The average construction liability insurance cost is around $73 per month or $876 per year for a $1 million general liability coverage. Below, you’ll find a table outlining some of the most popular insurers and the average monthly and annual premiums for general liability insurance policies:
|Insurance Provider||Average Monthly Rate||Average Annual Rate||Best for|
|Hiscox||$39.40||$472.80||Construction companies who have domestic and international projects|
|CoverWallet||$64.12||$769.44||Construction insurance quotes comparison online|
|Thimble||$94.64||$1,135.68||BOP for construction companies|
|Tivly||$110||$1,320||Comparing construction insurance quotes over the phone|
|Next||$126.50||$1,518||Best overall; Fastest general liability insurance for commercial construction companies|
|Geico||$158||$1,896||Small to mid-sized commercial construction contractors|
|AXA||$175||$2,100||Building under construction insurance and large commercial projects|
|State Farm||$179||$2,148||Small to mid-sized commercial construction contractors|
Always compare construction insurance quotes to find the best liability coverage at the most budget-friendly rate. Start by clicking the “Get Quotes” button on this page.
The average construction workers comp insurance cost is around $271 per month or $3,250 per year due to the high risk involved in construction work. Factors that determine rates are location, payroll, claims history, and business history.
|Insurance Provider||Average Monthly Rate||Average Annual Rate|
Get all the best quotes from leading providers in a click of a button!
If you’re searching for “construction insurance near me,” then look no further. In this section, we’ll take a look at the best construction insurance companies. Read to know their pros, cons, and rate for a $1 million general liability insurance.
Compare quotes online
Online policy management
Easy policy cancellation
General liability insurance has waiver of subrogation
You need to call a representative to get a quote for workers compensation insurance
CoverWallet’s commercial construction insurance offers general liability, commercial property, builder’s risk, and commercial auto insurance.
Your general liability insurance from this company will have a $2 million per occurrence limit with a $2 million aggregate. Terrorism coverage and waiver of subrogation are already included.
As for commercial property insurance, CoverWallet allows the policy to provide $10,000 contents coverage and $25,000 building coverage.
CoverWallet’s commercial auto insurance for your construction company can cover dump trucks, bulldozers, and other motorized construction equipment that traverse roads.
Last but not least, your builders risk insurance from CoverWallet provides up to more than $100,000 coverage. You can insure multiple construction projects with it.
Best for: Construction insurance quotes comparison online
Average cost: $64.12 per month
Our rating: 10/10
Responsive customer service
24/7 claims filing
Will refer you to partners if your business doesn’t match its underwriting appetite
A partner of trusted small business insurance companies such as NEXT and Thimble
You need to call to get a quote
Tivly (formerly CommercialInsurance.NET) sells general liability, commercial property, workers compensation, commercial auto, and other business insurance policies for construction companies.
This company doesn’t immediately provide a construction insurance quote online. After providing your details through its website, a representative will then call to talk about the specifics of the policies you want to get.
You can also call Tivly now to compare quotes over the phone.
Best for: Comparing construction insurance quotes over the phone
Average cost: $110 per month
Our rating: 10/10
Cheap general liability insurance
Excellent customer reputation
Issues a certificate of insurance that you can send to anyone easily
Great value for money
Fastest GL policy online
10% discount if you purchase two or more policies
Doesn’t sell excess liability insurance for construction companies
NEXT commercial construction insurance offers general liability, workers' compensation, and commercial property insurance. Though it’s a fairly new construction insurance company, NEXT covers small and big general, residential, industrial, and commercial construction firms.
This company’s general liability insurance for construction companies has a $1 million per occurrence limit with a $2 million aggregate. Tools and equipment coverage as well as professional liability insurance is included in its terms.
As for commercial property insurance, NEXT provides up to more than $1 million coverage for your construction company’s building and contents. The commercial property insurance of this company also protects you against employee theft and business interruption.
We encourage you to get two or more policies from NEXT to enjoy cheap construction insurance. If you buy many policies, the company provides a 10% discount.
Best for: Best overall; Fastest general liability insurance for commercial construction companies
Average cost: $126.50 per month
Our rating: 10/10
Comprehensive commercial property insurance
Equipment breakdown coverage can be added to commercial property insurance
You can choose to get a short-term general liability insurance
Doesn’t sell commercial auto insurance for construction businesses
Thimble’s construction insurance is available as a business owner’s policy that offers general liability and commercial property insurance.
Your construction company’s general liability insurance from Thimble will have a $1 million per occurrence limit with a $250-$1,000 deductible.
Thimble’s commercial property insurance, on the other hand, has a $25,000-$500,000 contents coverage and a $25,000-$1 million building coverage. Your deductible is $500-$2,500.
Best for: BOP for construction companies
Average cost: $94.64 per month
Our rating: 10/10
Fast to process claims
In-house team of underwriters
Poor customer reviews on BBB
Hiscox’s general liability insurance for construction companies has a $2 million per occurrence with a $2 million aggregate limit. It doesn’t have additional coverage. However, your general liability insurance from this company provides worldwide protection.
Professional liability insurance from Hiscox has a $1 million per occurrence with a $2 million aggregate.
As for construction commercial property insurance, it offers $25,000 contents coverage and $50,000 building coverage.
Best for: Construction companies who have domestic and international projects
Average cost: $39.40 per month
Our rating: 9/10
Provide coverage for projects around the globe
Specializes in providing insurance for large projects
Provides specialty environmental coverage
No physical offices in the United States
Not designed for small residential construction projects
AXA is an insurance firm that provides a wide range of construction industry insurance policies for builders and contractors around the world. AXA focuses on construction project insurance, which is categorized on their site under the sub-category of AXA XL construction insurance.
Here you’ll also be able to find a comprehensive list of coverages, including casualty insurance, environmental insurance, construction contractor insurance, and several other umbrella policies designed to cover all of your needs at the same time. So if you’re looking for a one-stop-shop for major projects, AXA is a great company to go with.
Best for: Building under construction insurance and large commercial projects
Average cost: $175 per month
Our rating: 9/10
Amazing customer service and claims handling
Wide variety of comprehensive construction insurance plans are available
Competitive pricing and deals available for loyal customers
Brick-and-mortar offices located nationwide for easy access
You may have trouble when making out-of-state claims
While Geico may be the nation’s biggest insurer, State Farm is one of the country’s oldest insurance companies. Through their history of being in business, the insurance provider has built a stellar reputation based on providing outstanding customer service, competitive pricing, and offering a wide variety of coverage options for business owners and contractors.
Whether you’re looking for comprehensive worker’s compensation plans, new building site coverage, builder-owner insurance, or general builder’s risk insurance, State Farm can cover all of your needs. If you’re looking for an insurance company that makes getting insurance a breeze and provides reliable service and respectful communication, State Farm is one of the best in the industry.
Best for: Small to large-sized local commercial construction companies
Average cost: $179 per month
Our rating: 9/10
Large insurer with agents and locations nationwide
Provides coverage for small companies/projects and larger projects alike.
Handle claims through the Geico app
Some policy coverage will go through a third-party insurance partner
Geico is one of the biggest insurers in the United States, and they offer everything from simple home and auto coverage to insurance policies for large commercial construction projects. Geico is well known in the construction industry for their fair prices and their ease of access.
Claims can be easily made through their insurance app, and agents typically get back to policyholders quickly and handle claims efficiently. So whether you’re looking for small construction business insurance or coverage for a larger project, Geico can help you create a customized plan that’s perfect for your needs.
Best for: Small to mid-sized commercial construction contractors
Average cost: $158 per month
Our rating: 8/10
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!