Securing the right insurance coverage is crucial for contractors in Alaska to protect their business from the many risks inherent in construction work. This guide provides an overview of typical contractor insurance costs in Alaska across key policies like general liability, workers’ compensation, surety bonds, and more.
We’ll explore the factors that impact premiums, offer benchmark ranges for small, medium and large contractors, and suggest strategies to secure favorable rates. Understanding typical insurance expenses allows Alaska contractors to make informed decisions when buying policies for their business.
In Alaska’s unique environment, contractors face distinct challenges. Liability insurance for contractors is crucial to mitigate risks. Additionally, understanding workers’ compensation insurance for contractors is a legal requirement. Our comprehensive guide to contractors insurance can help you navigate these waters.
Key Factors Influencing Contractor Insurance Costs
Here are some of the key variables that influence insurance costs for Alaska contractors:
– Type of work – Certain construction trades like roofing, electrical and plumbing are seen as higher risk and have higher premiums.
– Experience – New contractors often pay more for insurance until they build experience. More experienced contractors tend to get better rates.
– Claims history – Too many past claims will lead to increased premiums. A clean history helps lower rates.
– Coverage limits – Higher liability limits or workers’ compensation benefits mean higher premiums.
– Number of employees – More employees increase premiums for workers’ compensation and other policies.
– Safety record – Good safety and low injury rates can qualify contractors for discounted premiums.
– Revenue size – Larger contractors get lower rates based on broader risk distribution. Smaller firms pay more.
– Insurance company – Rates can vary among insurers based on loss payout reputation and financial strength.
Contractor Premium Benchmarks
The table below displays typical insurance purchases for small, medium and large contractors in Alaska. This data provides approximate premium ranges to benchmark against.
| Criteria | Small Contractor | Medium Contractor | Large Contractor | XL Contractor |
| Revenue | $150K | $500K | $1M | $2.5M |
| Employees | 1 | 3 | 5 | 10 |
| Autos | 1 | 2 | 3 | 5 |
| Worth of Tools | $5K | $10K | $25K | $50K |
| General Liability | Yes | Yes | Yes | Yes |
| Workers’ Comp | Yes | Yes | Yes | Yes |
| Commercial Auto | Yes | Yes | Yes | Yes |
| Inland Marine | Yes | Yes | Yes | Yes |
| Umbrella | No | No | Yes | Yes |
Remember, your actual premiums depend on your unique risk attributes. Contractors who get tailored coverage with quality carriers may achieve costs below these averages.
General Liability Insurance
General liability protects against third party property damage and bodily injury claims arising from your projects. Typical premium ranges are 1-5% of revenue for $1 million occurrence limits.
| Low | High | Average | |
| Electrician | |||
| – Small | $600 | $1,100 | $900 |
| – Medium | $1,800 | $2,700 | $2,000 |
| – Large | $3,700 | $5,000 | $4,600 |
| Plumber | |||
| – Small | $2,300 | $4,025 | $2,300 |
| – Medium | $7,600 | $11,400 | $7,600 |
| – Large | $15,200 | $19,760 | $15,200 |
| Painter | |||
| – Small | $800 | $2,900 | $1,600 |
| – Medium | $2,600 | $4,600 | $3,300 |
| – Large | $5,200 | $8,400 | $6,300 |
| Landscaper | |||
| – Small | $692 | $2,717 | $1,500 |
| – Medium | $2,306 | $4,314 | $3,100 |
| – Large | $4,613 | $7,755 | $5,900 |
| Handyman | |||
| – Small | $1,400 | $2,450 | $1,900 |
| – Medium | $4,600 | $6,900 | $4,700 |
| – Large | $9,100 | $11,830 | $10,200 |
| Carpenter | |||
| – Small | $1,200 | $3,500 | $2,400 |
| – Medium | $4,100 | $6,400 | $5,300 |
| – Large | $8,200 | $12,900 | $10,600 |
| General Contractor | |||
| – Medium | $4,100 | $8,600 | $6,300 |
| – Large | $8,100 | $11,600 | $9,900 |
| – XL | $20,300 | $25,000 | $22,700 |
Key Factors Affecting Premiums
– Type of work – Certain trades like roofing cost more to insure.
– Revenue size – Higher revenue leads to higher premiums.
– Claims history – Too many past claims will drive up rates.
– Experience – New contractors pay more until building a track record.
– Risk transfer – Requiring subs to carry GL insurance helps lower a contractor’s costs.
– Policy limits – Higher limits mean higher premiums. Lower limits can lead to uncovered losses.
– Deductibles – Choosing a higher deductible reduces premiums but increases out-of-pocket costs.
Workers Compensation Insurance
Workers’ compensation covers work-related injuries and illnesses of employees. Premium factors include:
| Low | High | Average | |
| Electrician | |||
| – Small | $1,746 | $3,820 | $2,183 |
| – Medium | $4,912 | $10,806 | $6,549 |
| – Large | $7,641 | $16,919 | $10,915 |
| Plumber | |||
| – Small | $2,794 | $6,111 | $3,492 |
| – Medium | $7,858 | $17,287 | $10,477 |
| – Large | $12,223 | $27,065 | $17,461 |
| Painter | |||
| – Small | $1,463 | $3,200 | $1,828 |
| – Medium | $4,114 | $9,050 | $5,485 |
| – Large | $6,399 | $14,170 | $9,142 |
| Landscaper | |||
| – Small | $2,504 | $5,478 | $3,130 |
| – Medium | $7,043 | $15,494 | $9,390 |
| – Large | $10,955 | $24,258 | $15,650 |
| Handyman | |||
| – Small | $4,616 | $10,097 | $5,770 |
| – Medium | $12,982 | $28,560 | $17,309 |
| – Large | $20,194 | $44,715 | $28,848 |
| Carpenter | |||
| – Small | $3,452 | $7,552 | $4,315 |
| – Medium | $9,710 | $21,361 | $12,946 |
| – Large | $15,104 | $33,444 | $21,577 |
| General Contractor | |||
| – Medium | $13,848 | $30,293 | $17,310 |
| – Large | $21,638 | $47,603 | $28,850 |
| – XL | $40,390 | $89,435 | $57,700 |
Key Factors Affecting Premiums
– Payroll – Higher payroll increases premiums.
– Job classification – The type of work performed is classified by risk level. Higher risk work costs more to insure.
– Experience rating – Contractors with fewer past claims get an ‘experience credit’ on premiums. High claims lead to a debit increasing premiums.
– Industry trends – Rising loss trends in the construction industry as a whole can increase rates.
– Safety record – Good safety and low injury rates can qualify contractors for premium discounts.
– Subcontractors – Using uninsured subcontractors increases a contractor’s premiums. Requiring subs to carry their own workers’ comp helps lower a contractor’s costs.
– State laws – Benefit levels mandated in each state impact premiums. Alaska has high workers’ comp costs.
For Alaska contractors, typical workers’ comp premiums often range from 5% to 15% of payroll.
Additional Contracting Insurance Coverages
Beyond general liability and workers’ compensation, additional coverages for Alaska contractors include:
Commercial Auto Insurance– Covers vehicles used for business. Typical premiums range from $2,000-$5,000 annually per vehicle.
Inland Marine – Protects tools and equipment onsite and in transit. Typical premiums range from $750-$7,500 annually for $100K to $500K in coverage.
Surety Bonds – Required for public works. Typical premiums range from 1%-5% of the bond amount based on contractor qualifications.
Business Property Insurance – Covers offices, warehouses, and other business properties. Typical premiums range from $1,000-$10,000 annually.
Employment Practices Liability – Defends against employment lawsuits. Typical premiums range from $2,500-$10,000 annually.
Cyber Liability – Responds to data breaches. Typical premiums range from $500-$2,500 annually.
Umbrella Liability – Provides additional liability limits above other policies. Typical premiums range from $1,000-$5,000 annually per $1 million in extra coverage.
Partnering With ContractorNerd.com
Are you an Alaska contractor looking to protect your business while maximizing value from your insurance program? The team at ContractorNerd.com can help.
Our dedicated experts provide customized solutions tailored to your specific contracting operation. We leverage our strong carrier relationships to access top insurance markets helping Alaskan contractors secure optimal coverage at competitive rates.
Get matched with a specialist today to start optimizing your insurance portfolio. Protect your hard-earned business while positioning for success both now and in the future.