Excavation Contractor Insurance – Cost and Types Of Policies

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

With the protection provided by general insurance and all the other types 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 contractor enterprise, you must consider how much financial liability you are taking on.

If your excavation contractor business runs without proper insurance, you are taking a giant chance not just of losing some money but of a total wipe-out.

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

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 we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your excavation contractor business?

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

Your excavation contractor business is not sheltered by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

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

When you are running your excavation contractor operations, you can’t avoid responsibility for the outcomes of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as a limited liability company, all of that liability belongs to you alone.

What does excavation contractor insurance protect you from?

For your excavation contractor business, the most important types of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also 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 contractor business owner should know when negotiating the insurance needed.

The main headings of insurance for your excavation contractor businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any excavation contractor business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can require compensation.

General liability insurance policy for your excavation contractor business covers you against claims coming from injury to customers or damage to their property.

It protects your excavation contractor business from the claims themselves and as well to any resulting court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The usual level of general liability insurance for your excavation contractor business would be with a boundary of $1 million for a single event 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 contractor insurance operations.

Professional liability insurance for your excavation contractor business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your excavation contractor business for them, you can quickly have to fight a monetary claim.

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

Most small excavation contractor business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of excavation contractor insurance section below for average prices of professional liability insurance for your excavation contractor 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 the results didn’t meet your description of function, or that your advice was basically incorrect.

You need to be aware of the specific laws of product liability in your own state.

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

To cover yourself against any following lawsuit, you need Product liability insurance for excavation contractor

Only you can estimate exactly how much insurance you need.

Best advice is to contact experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your excavation contractor business

Beware! – most 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 right 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 guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is insured if your car is involved in an accident.

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

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

Tools and Equipment insurance

Since your excavation contractor business needs specific and dedicated equipment, you can appreciate 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 destroy your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your excavation contractor business running.

It is difficult to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your excavation contractor business’ equipment.

Commercial Property insurance

Any excavation contractor business that owns or rents space in a building needs a commercial property insurance policy.

If you own the building, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Your physical building location needs to carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your excavation contractor business operates in areas of high risk, like California or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where unlimited cold snaps can cause damage to outer coverings of excavation contractor business premises, there is a need for more supplementary cover than in warmer climes.

Because 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 contractor insurance section below to give some idea of the average prices per million dollars of property insurance for your excavation contractor business.

Temporary insurance by month, week or day for your excavation contractor business

Is your excavation contractor business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for excavation contractor – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having reduced premiums but still having the same risk cover.

The important feature of short-term insurance is that you purchase the cover for a defined period – a nominated 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 increased.

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

Business Owners Policy BOP for your excavation contractor business

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

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

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

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

There are a few 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 dictate whether you are allowed to take out BOP cover.

The typical business that can take out a BOP policy must have no more than one hundred employees, and under five million dollars in annual sales.

In addition, 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 contractor business employees

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

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

The benefits include 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 having to pay penalties levied by the states.

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

In these states, you may not get your workers compensation obligations from private insurance providers.

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

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

Average costs of these types of insurance

Although every excavation contractor insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your excavation contractor businesses needs.

Cost of insurance for your excavation contractor operations depends on many different factors.

We have calculated these figures for small freelance excavation contractor businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, but in smaller states like New Mexico, they can be about 20%-30% lower.

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

You should talk to professional insurance agents and brokers, or insurance company representatives.

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

Another good source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for excavation contractor operations?

This is an umbrella term used to describe common insurance policies designed to protect excavation contractor business owners from risks like bodily injury, property damage, claims of negligence.

Does my excavation contractor business have to have insurance?

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

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

What does a small excavation contractor business insurance policy cover?

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

The specific 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 contractor insurance.

How much will excavation contractor business insurance cost?

On top of the size of the business, certain 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.

You can search for more information insurance for excavation contractor, in the search box below, and follow the relevant links.

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