Operating a construction business in Arkansas exposes you to substantial risks that require proper insurance protection. As a contractor, you face exposures including property damage, jobsite injuries, lawsuits, cyber crimes and more. Having tailored, cost-effective insurance is essential to fully safeguard your company’s assets and future.
This extensive guide will uncover typical insurance costs for Arkansas contractors and provide benchmark premium ranges across popular policies like general liability, commercial auto, workers’ compensation, equipment coverage, and more. We’ll outline the key factors impacting your premiums, and suggest strategies to secure favorable rates.
Understanding typical insurance expenses in Arkansas allows you to accurately evaluate policies suitable for your contracting business. While your actual costs depend on your unique risk attributes, this data offers helpful context to inform smart insurance decisions.
Arkansas contractors should prioritize comprehensive coverage. Our guide on contractors liability insurance outlines crucial protections. Don’t overlook the importance of workers compensation for contractors. For a holistic approach to insurance options for contractors, explore our comprehensive guides.
Key Factors Influencing Insurance Premiums
Here are some of the main factors that impact insurance costs for contractors in Arkansas:
– Type of contracting work – Certain high-risk trades like roofing, electrical, and plumbing tend to have higher insurance rates than lower hazard work like simple remodeling. Insurers classify risk accordingly.
– Years in business – Newer contractors often pay higher premiums until they establish a solid claims history. Experienced contractors with 5+ years in business tend to get better rates.
– Claims and loss history – Too many past liability or workers’ compensation claims will drive up premiums. A clean loss record with zero major claims helps lower rates.
– Coverage limits – Higher liability limits, workers’ compensation limits or inland marine equipment limits mean higher premiums. Limits must adequately match the risk exposure.
– Number of employees – More employees increase payroll exposure and workers’ comp costs. Rates climb as employee count rises.
– Safety record – Contractors with OSHA violations, construction defect lawsuits, or poor injury rates will pay more. Discounts reward contractors with stellar safety programs.
– Annual revenue size – Larger contractors get better rates thanks to wider risk distribution and economies of scale. Premiums are lower as a percent of sales.
– Subcontractor coverage – Using uninsured subcontractors increases a contractor’s liability and workers’ comp risk. Requiring subs to carry their own insurance helps lower a contractor’s premiums.
– Insurance company & market competition – Rates can vary significantly among insurers based on loss payout history, financial strength, and market competitiveness. A soft insurance market typically brings lower rates.
Controlling risk is crucial. Maintaining detailed records, instituting thorough safety protocols, securing project bonds, requiring subcontractor insurance certificates, and choosing adequate coverage limits while avoiding over-insurance all help minimize premium costs.
Benchmark Insurance Costs by Contractor Size
Here are typical insurance coverages carried by contractors in Arkansas segmented by business revenue size. This data provides helpful benchmarking to compare your costs:
| 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 |
Keep in mind your actual premiums vary based on your unique risk characteristics like location, safety protocols, client type, and loss history. Contractors who secure properly tailored policies with reputable carriers may achieve rates toward the lower end of the ranges cited below.
General Liability Insurance Costs
General liability, also known as CGL, protects your business if a third party alleges bodily injury or property damage caused by your contracting operations. Typical Arkansas contractors general liability premiums range from 1% to 7% of annual revenue for $1 million per occurrence limits.
| Low | High | Average | |
| Electrician | |||
| – Small | $900 | $1,800 | $1,400 |
| – Medium | $2,900 | $6,100 | $3,800 |
| – Large | $5,100 | $11,100 | $7,200 |
| Plumber | |||
| – Small | $4,600 | $8,200 | $5,600 |
| – Medium | $15,700 | $37,700 | $22,600 |
| – Large | $23,200 | $44,100 | $34,300 |
| Painter | |||
| – Small | $1,200 | $3,200 | $1,600 |
| – Medium | $2,700 | $5,000 | $3,800 |
| – Large | $4,100 | $11,000 | $8,000 |
| Landscaper | |||
| – Small | $502 | $1,804 | $1,100 |
| – Medium | $945 | $5,187 | $2,700 |
| – Large | $2,078 | $9,468 | $4,800 |
| Handyman | |||
| – Small | $800 | $2,900 | $2,200 |
| – Medium | $2,100 | $9,800 | $6,100 |
| – Large | $4,900 | $19,600 | $12,300 |
| Carpenter | |||
| – Small | $2,000 | $10,400 | $4,000 |
| – Medium | $6,800 | $11,400 | $8,900 |
| – Large | $12,600 | $25,600 | $18,800 |
| General Contractor | |||
| – Medium | $3,100 | $12,900 | $6,000 |
| – Large | $6,200 | $17,900 | $10,100 |
| – XL | $15,400 | $42,100 | $23,600 |
Arkansas Contractors General Liability Premium Ranges
| Annual Revenue | Typical Premium Range |
|---|---|
| $150,000 | $1,500 – $5,000 |
| $500,000 | $3,500 – $15,000 |
| $1 Million | $10,000 – $40,000 |
Key Rating Factors for General Liability Insurance
– Type of contracting/trade work
– Annual sales and revenue
– Past liability claims history
– Years in business
– Risk transfer techniques
– Policy limits and deductible amount
– Financial health of insurance company
Maintaining proper risk management is crucial for controlling general liability costs. Requiring subcontractors to carry adequate insurance, securing surety bonds for large projects, collecting certificates of insurance from all subcontractors, and asking for additional insured status can help transfer risk away from your business. Aligning your coverage limits to your recent project size also helps optimize premiums.
Workers Compensation Insurance Costs
Workers’ compensation insurance covers lost wages, medical benefits, rehabilitation services and death benefits if an employee suffers an injury, illness or accident while working. Premiums vary based on risk class, total payroll, past claims, safety initiatives and state laws. Arkansas ranks among the more affordable states for workers’ compensation.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,244 | $2,720 | $1,555 |
| – Medium | $3,498 | $7,695 | $4,664 |
| – Large | $5,441 | $12,048 | $7,773 |
| Plumber | |||
| – Small | $1,540 | $3,368 | $1,925 |
| – Medium | $4,331 | $9,528 | $5,774 |
| – Large | $6,737 | $14,917 | $9,624 |
| Painter | |||
| – Small | $1,697 | $3,712 | $2,121 |
| – Medium | $4,773 | $10,500 | $6,363 |
| – Large | $7,424 | $16,439 | $10,606 |
| Landscaper | |||
| – Small | $1,472 | $3,220 | $1,840 |
| – Medium | $4,140 | $9,108 | $5,520 |
| – Large | $6,440 | $14,260 | $9,200 |
| Handyman | |||
| – Small | $4,054 | $8,867 | $5,067 |
| – Medium | $11,400 | $25,081 | $15,201 |
| – Large | $17,734 | $39,268 | $25,334 |
| Carpenter | |||
| – Small | $4,038 | $8,832 | $5,047 |
| – Medium | $11,356 | $24,983 | $15,141 |
| – Large | $17,665 | $39,114 | $25,235 |
| General Contractor | |||
| – Medium | $12,161 | $26,602 | $15,201 |
| – Large | $19,001 | $41,803 | $25,335 |
| – XL | $35,469 | $78,539 | $50,670 |
Arkansas Contractors Workers Compensation Premium Ranges
| Annual Payroll | Typical Premium Range |
|---|---|
| $50,000 | $750 – $7,500 |
| $250,000 | $5,000 – $25,000 |
| $500,000 | $7,500 – $50,000 |
Key Rating Factors for Workers’ Compensation Insurance
– Employee payroll amount
– Job classifications and risk
– Experience modification rating
– Industry loss trends
– Documented safety programs
– Use of uninsured subcontractors
– Premium credits & debits
– Deductible program
– Financial strength of insurance carrier
Maintaining a safe workplace and preventing employee injuries is key to controlling workers’ compensation costs. Enforcing proper safety protocols, installing guard rails, requiring harnesses and fall protection and conducting thorough training helps minimize workplace incidents. Using insured subcontractors also helps reduce premiums.
Supplemental Contractors Insurance Policies
Beyond general liability and workers’ compensation, most Arkansas contractors need additional insurance coverages:
Commercial Auto Insurance
Covers vehicles used to transport equipment, materials and employees to job sites. Typical contractors commercial auto premiums range from $1,500 – $4,000 per vehicle.
Inland Marine (Contractors Equipment) Insurance
Protects tools, equipment machinery against theft and damage during transit and while on job sites. Typical premiums range from $1,500 – $7,500 depending on desired limits and deductible.
Surety Bonds
Required by law for public works projects. Typical premiums range from 1%-3% of the total bond amount based on contractor qualifications and credit.
Builder’s Risk Insurance
Covers construction projects and properties while under construction. Premiums range from 0.3% to 2%+ of the completed value.
Cyber Liability Insurance
Safeguards against data breaches, network security incidents, hacking damage, electronic theft and more. Premiums typically range from $500 – $2,000+ annually.
Commercial Property Insurance
Protects business locations like offices, warehouses, storage yards and similar premises. Premiums range from $500 for small spaces up to $15,000+ for larger premises.
Umbrella Liability Insurance
Provides additional liability limits above general liability and auto. Typical premiums range from $750 – $2,000 annually per $1 million in extra coverage.
Employment Practices Liability
Defends against wrongful termination, discrimination, harassment and other employment claims. Typical premiums start around $2,000 annually.
Pollution Liability
Covers cleanup costs and third-party claims from pollution incidents. Starts around $2,000 annually but depends on hazardous exposure.
Partner With a Specialist to Secure Optimal Coverage
Sourcing the right insurance for your contracting business on your own can be challenging. Premiums and products vary greatly based on market conditions, risk attributes, and carrier appetite. An experienced specialist makes it easy.
The dedicated advisors at ContractorNerd.com provide Arkansas contractors like you with personalized guidance and cost-effective insurance solutions tailored to your exact needs. We take the guesswork and stress out of insurance, so you can focus on your business.
Benefits of working with ContractorNerd.com include
– Access to top regional and national insurance carriers
– Contracting and construction industry expertise
– Competitive insurance quotes
– Policy review and optimization
– Ongoing support as your business evolves
Don’t leave your company exposed or overpay for inadequate coverage. The professionals at ContractorNerd.com have you covered. Get a free quote today to start securing the precise insurance policies your contracting business requires.