Excavation and Grading insurance – what kind and at what cost

Whenever you budget the expenses of your business, Excavation and Grading insurance must be near the top of the list because you can’t always know exactly what can happen in the future.

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With the protection provided by insurance against accidents and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Excavation and Grading enterprise, you must consider how much financial danger you are taking on.

If your Excavation and Grading business runs without proper insurance, you are taking a giant chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

Excavation and Grading Insurance

In this article, we are giving very general guidelines for startup businesses to outline what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Excavation and Grading business?

What this means, for any Excavation and Grading business owner, is that if some customer claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Excavation and Grading business is not protected by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have claimed.

When you are running your Excavation and Grading operations, you can’t avoid responsibility for the outcomes of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does Excavation and Grading insurance protect you from?

For your Excavation and Grading business, the most important types of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some legal kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Excavation and Grading business owner should know when negotiating the insurance needed.

The main types of insurance for your Excavation and Grading businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Excavation and Grading business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can sue you for compensation.

General liability insurance policy for your Excavation and Grading business covers you against claims coming from injury to visitors or damage to their property.

It protects your Excavation and Grading business from the claims themselves and also to any follow-on court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts insist on proper liability insurance.

The normal level of general liability insurance for your Excavation and Grading business would be with a cap of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Excavation and Grading insurance operations.

Professional liability insurance for your Excavation and Grading business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Excavation and Grading business for them, you can quickly have to fight a law suit.

Even if the lawsuit against you is decided in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Almost all small Excavation and Grading business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Excavation and Grading insurance section below for average prices of professional liability insurance for your Excavation and Grading operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that what you delivered didn’t meet your description of function, or that your guidance was basically incorrect.

You need to know the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held responsible for results caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for Excavation and Grading

Only you can estimate exactly how much insurance you should get.

Best advice is to consult with experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your Excavation and Grading business

Beware! – almost all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the car is being used for business purposes.

The best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial car policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your van is involved in a collision.

Most states, other than Virginia and New Hampshire, require this type of insurance.

The wanted value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Excavation and Grading business needs specialized and expensive equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can wipe-out your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy whatever needed to keep your Excavation and Grading business running.

It is difficult to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Excavation and Grading business’ equipment.

Commercial Property insurance

Any Excavation and Grading business that owns or rents space in a building should have a commercial property insurance policy.

If you own the space, you certainly have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Every physical building location needs to carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Excavation and Grading business deals in areas of high risk, like California or South Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where unlimited cold snaps can cause damage to outer coverings of Excavation and Grading business premises, there is a need for more supplementary cover than in warmer climes.

Whereas the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Excavation and Grading insurance section below to give some idea of the average prices per million dollars of property insurance for your Excavation and Grading business.

Temporary insurance by month, week or day for your Excavation and Grading business

Is your Excavation and Grading business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Excavation and Grading – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having identical risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Excavation and Grading business

You have the choice to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Excavation and Grading businesses, such as yours.

There are two limits that will rule whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle cover.

Also, the size of your business will determine whether you are allowed to take out BOP cover.

The normal business that is eligible for a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual revenue.

Plus, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Excavation and Grading business employees

In most states, it is mandatory to have workers compensation insurance when your Excavation and Grading business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you cannot obtain your workers compensation obligations from private insurance providers.

Workers compensation premiums are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must consult the relevant authorities in your state.

Average costs of these types of insurance

Although every Excavation and Grading insurance requirement is unique, there are enough examples of usual quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have gathered for the main types of insurance your Excavation and Grading businesses needs.

Types of insurance Price range
Public liability insurance $296 – $679
Equipment insurance $425 – $1142
General liability insurance $734 – $917
Commercial vehicle insurance $1816 – $3134
Commercial insurance $1068 – $2764
Product liability insurance $344 – $585

Cost of insurance for your Excavation and Grading operations depends on many different factors.

We have reckoned these figures for small independent Excavation and Grading businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like Oregon, they usually are about 20%-30% cheaper.

The location and size and type of your Excavation and Grading business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Excavation and Grading operations?

This is a general term used to describe basic insurance policies designed to protect Excavation and Grading business owners from risks like bodily injury, property damage, claims of negligence.

Does my Excavation and Grading business have to have insurance?

Some of the forms of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Excavation and Grading business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Excavation and Grading insurance.

How much will Excavation and Grading business insurance cost?

As well as the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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