Paving Contractors Insurance – What Kind and at What Cost

Whenever you budget the expenses of your business, paving contractors insurance must be included in the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by liability insurance and all the other kinds 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 paving contractors enterprise, you must consider how much financial risk you are taking on.

Business Insurance for paving contractors

If your paving contractors business runs without proper insurance, you are taking a tremendous 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 small 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 paving contractors business?

What this means, for any paving contractors business owner, is that if some company 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 paving contractors business is not protected by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Montana, 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 privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sued for.

When you are running your paving contractors operations, you can’t deny 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 as a person.

What does paving contractors insurance protect you from?

For your paving contractors business, the most important sorts 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 explain the most important points any paving contractors business owner should consider when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any paving contractors business is dealing directly with customers, and that means you generally have the danger that some accident can happen to them personally or else something of theirs can be ruined.

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

General liability insurance policy for your paving contractors business insures you against claims coming from injury to customers or damage to their property.

It protects your paving contractors business from the claims themselves and also to any follow-on 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 insist on proper liability insurance.

The average level of general liability insurance for your paving contractors business would be with a upper limit 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 paving contractors insurance operations.

Professional liability insurance for your paving contractors business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your paving contractors 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 high, and the impact on your reputation can be damaging.

Most small paving contractors 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 paving contractors insurance section below for average prices of professional liability insurance for your paving contractors 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 they received didn’t meet your description of function, or that your guidance 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 damages caused by products claimed to be defective.

To cover yourself against any possible lawsuit, you need Product liability insurance for paving contractors

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

Best advice is to talk to experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your paving contractors business

Take care! – practically all policies for private vehicle insurance do not cover any event 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 proper commercial vehicle insurance package.

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

Also, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is covered if your truck is involved in a crash.

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

The required value of the insurance depends on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your paving contractors business needs unique and dedicated equipment, you will realize 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 unforeseen acts.

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

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy any equipment needed to keep your paving contractors business running.

It is hard to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your paving contractors business’ equipment.

Commercial Property insurance

Any paving contractors business that owns or rents space in a building should have a commercial property insurance policy.

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

Any 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 paving contractors business operates in areas of high risk, like Florida or Georgia, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

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

Although 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 paving contractors insurance section below to give some indication of the average prices per million dollars of property insurance for your paving contractors business.

Temporary insurance by month, week or day for your paving contractors business

Is your paving contractors business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for paving contractors – 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 lower premiums but still having adequate risk cover.

The key feature of short-term insurance is that you buy the cover for a defined period – a designated 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 higher business activity, get the existing cover improved.

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

Business Owners Policy BOP for your paving contractors 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 packaging 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 frequently the right choice for small and medium-sized paving contractors 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 policies.

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

The usual business that is allowed to take a BOP policy must have less than one hundred employees, and maximum five million dollars in annual revenue.

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

Workers Compensation insurance for your paving contractors business employees

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

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

The benefits cover 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 allow coverage from the government-run monopoly state funds.

In these states, you cannot get 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 see the relevant authorities in your state.

Average costs of these types of insurance

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

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

The list below is of annual premiums we have gathered for the main types of insurance your paving contractors businesses needs.

Types of insurance Price range
General liability insurance $765 – $890
Product liability insurance $260 – $575
Public liability insurance $255 – $750
Equipment insurance $420 – $1465
Commercial vehicle insurance $1945 – $3335
Commercial insurance $980 – $2330

Cost of insurance for your paving contractors operations depends on many different factors.

We have calculated these figures for small independent paving contractors businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like Oregon, they can be about 20%-30% cheaper.

The location and size and type of your paving contractors 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.

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

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

FAQ

What is small business insurance for paving contractors operations?

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

Does my paving contractors business have to have insurance?

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

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

What does a small paving contractors business insurance policy cover?

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

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for paving contractors insurance.

How much will paving contractors business insurance cost?

As well as the size of the business, some 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 paving contractors, in the search box below, and follow the relevant links.

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