General contractor insurance is essential for any contractor looking to operate in the construction industry. Insurance not only protects the contractor in case of accidents or damage but also gives clients a sense of security when hiring a contractor. However, many contractors are often curious about the cost of general contractor insurance. In this article, we will look at the average cost of general contractor insurance.
What is General Contractor Insurance?
General contractor insurance has two basic components: general liability insurance and worker’s compensation insurance.
General liability insurance protects a contractor against financial loss should they be held responsible for property damage or bodily injury caused by their work. This type of insurance also provides coverage for lawsuits, judgments, and settlements.
Worker’s compensation insurance provides wage replacement and medical benefits to injured workers. It is mandatory in most states.
How Much Does General Contractor Insurance Cost?
The cost of general contractor insurance depends on several factors, including the size of the company, the state in which the contractor is operating, and the type of work being performed.
The average cost of general liability insurance for a contractor ranges from $450 to $1,900 per year. However, this cost can be significantly higher if the contractor is operating in a high-risk industry, such as roofing or electrical work.
Worker’s compensation insurance costs vary depending on the state. The average cost of worker’s compensation insurance for a contractor in the United States is $0.75 per $100 of payroll. For example, a contractor who pays their employees a total of $100,000 per year would pay an average of $750 for worker’s compensation insurance.
It is important to note that the cost of general contractor insurance is not a fixed amount. Contractors should obtain quotes from several insurance providers to compare coverage and costs.
In conclusion, general contractor insurance is an essential investment for any contractor operating in the construction industry. While the cost of general contractor insurance varies depending on several factors, including the type of work being performed and the state in which the contractor is operating, insurance can provide peace of mind to contractors and their clients. To ensure that you are getting the best coverage at the best price, it is recommended that contractors obtain quotes from multiple insurance providers.