For construction companies in Colorado, having adequate insurance is vital to protect your business. As a contractor, you face diverse risks ranging from property damage and work injuries to lawsuits and natural disasters. Purchasing tailored, cost-effective insurance designed for your operations can safeguard your assets and future.
This guide will uncover typical insurance costs for Colorado contractors across popular policies like general liability, workers’ compensation, surety bonds, equipment coverage, and more. We’ll explore the key factors driving your premiums, provide benchmark data for small, medium and large contractors, and suggest strategies to secure favorable rates.
Understanding typical contractor insurance costs in Colorado allows you to evaluate policies suitable for your business. While your exact premiums vary based on your unique attributes, this data offers helpful context to make informed insurance decisions.
Colorado contractors must be prepared for various risks. Understanding contractor liability insurance cost is crucial for budgeting. A comprehensive look at workers compensation insurance for contractors protects both your team and your business. For a complete overview of insurance solutions for contractor businesses, refer to our expert resources.
Key Factors Influencing Insurance Costs
Here are some of the main factors that impact insurance costs for contractors in Colorado:
Type of Work
The type of contracting or trade work you perform is a major cost driver. Certain high-risk professions like roofing, electrical, plumbing, and HVAC contractors tend to have markedly higher insurance premiums than lower-risk trades like concrete contractors or general builders. Insurance companies classify trades by risk level, with hazardous occupations receiving elevated rates.
Years in Business
The length of time you’ve been operating also affects your premiums. New contractors are considered higher risk and tend to pay more for insurance until they build up experience in the field. Contractors who have been in business for 5-10+ years are generally seen as lower risk than newcomers and will often enjoy lower rates.
Claims History
Your prior claims experience also significantly impacts the insurance rates you’ll be offered. Contractors with a history of frequent claims, large losses, or costly claims will almost always face increased premiums – in some cases, frequent claims can even make you uninsurable. Maintaining a clean claims history with few if any major losses will benefit your rates.
Coverage Limits
The level of coverage you select for policies like general liability and workers’ compensation directly impacts your premiums. Higher limits equal higher premiums in most cases. You’ll need to weigh the costs against the amount of protection that makes sense for your business. Striking the right balance is important to avoid over or underinsuring.
Number of Employees
The number of employees on your payroll affects premiums for workers’ compensation insurance, which covers on-the-job injuries. More employees translates into greater overall risk exposure for work accidents. Even if you have few or no past claims, your premiums climb as headcount rises.
Employee Risk Classifications
The types of work performed by your employees also drives workers’ compensation costs. Employees doing higher-risk jobs in the field will trigger higher premiums than lower-risk workers like office staff. All jobs are classified by risk level, with increased rates tied to elevated risk categories.
Subcontractor Coverage
Your premiums are also impacted by whether you use subcontractors and whether they carry their own insurance. Contractors using uninsured subs take on much greater coverage responsibility and costs. Requiring subs to carry their own general liability and workers’ compensation significantly reduces your risk exposure and insurance costs.
Safety Record
Your safety practices, training protocols, and track record of past violations and incidents all impact your potential insurance costs. Contractors with many OSHA violations, compliance issues, and accident histories signal increased risk to insurers who will inflate rates in response. Investing in robust safety programs and training helps improve your record and control premiums.
Revenue Size
Your annual revenue as a contractor influences what you’ll pay for insurance. Insurers use revenue totals as a high-level benchmark for gauging the scale of your operations and setting rates accordingly. Larger firms with over $10 million+ in revenue have greater economies of scale and often receive lower rates thanks to their broader risk distribution. Small contractors can offset some of this through strong risk management and safety.
Insurance Company
The insurance carrier you select also affects your premiums. Insurers have their own loss models, overhead costs, and competitive strategies – making rates and risk appetite vary. Getting quotes from multiple companies is wise to uncover the best fit for your business’s unique risk profile. Be sure to compare similar coverage terms.
State Laws
The legal and regulatory landscape of Colorado shapes workers’ compensation costs in the state. Rules around benefits schedules, disability durations, settlement options, and medical cost containment steering impact loss patterns and rates charged by insurers. Mandated changes to state laws directly flow through to premium pricing.
Controlling risk through safety, experience, preventative measures, strong contracts, and insurance audits helps minimize insurance costs. Now let’s explore some ballpark costs.
Small, Medium, Large Contractor Benchmarking
The table below displays typical insurance policies secured by small, medium and large contractors in Colorado. It also provides a general benchmark based on contractor size to help you understand how your costs compare:
| 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 premiums fluctuate based on your unique attributes. Contractors who secure tailored coverage aligned to exposures with quality carriers at favorable terms can achieve costs toward the lower end of these ranges. If unsure, consult our network of specialized brokers to realize potential savings. Now let’s look at costs by coverage.
Typical General Liability Insurance Costs
General liability, also called CGL, protects your business if a third party alleges bodily injury or property damage caused by your construction operations. It covers legal defense costs, judgements and settlements. Typical premiums range from 1-5%+ of annual revenue depending on various risk factors:
| Low | High | Average | |
| Electrician | |||
| – Small | $700 | $2,500 | $1,600 |
| – Medium | $1,700 | $6,600 | $4,500 |
| – Large | $3,900 | $11,800 | $8,200 |
| Plumber | |||
| – Small | $4,100 | $14,300 | $9,100 |
| – Medium | $13,800 | $29,100 | $20,700 |
| – Large | $24,100 | $68,000 | $42,500 |
| Painter | |||
| – Small | $1,500 | $3,800 | $2,000 |
| – Medium | $2,600 | $7,200 | $4,900 |
| – Large | $4,000 | $15,600 | $9,300 |
| Landscaper | |||
| – Small | $1,140 | $2,706 | $1,600 |
| – Medium | $3,349 | $5,024 | $4,200 |
| – Large | $6,030 | $10,350 | $7,800 |
| Handyman | |||
| – Small | $1,600 | $4,400 | $3,300 |
| – Medium | $5,300 | $10,600 | $8,100 |
| – Large | $9,500 | $24,300 | $16,500 |
| Carpenter | |||
| – Small | $2,200 | $7,000 | $4,300 |
| – Medium | $7,300 | $15,600 | $11,400 |
| – Large | $13,200 | $35,800 | $23,900 |
| General Contractor | |||
| – Medium | $5,000 | $15,900 | $7,800 |
| – Large | $9,400 | $22,100 | $12,800 |
| – XL | $20,500 | $47,100 | $28,800 |
Typical General Liability Premiums for Contractors in Colorado
| Contractor Revenue | Typical Premium Range |
|---|---|
| <$500K | $1,500 – $7,500+ |
| $500K – $1M | $5,000 – $15,000 |
| $1M – $5M | $8,000 – $45,000 |
| >$5M | $25,000 – $250,000 |
Here are some of the key factors that influence general liability insurance costs for contractors in Colorado:
Type of Work – Certain high-risk trades like roofers, HVAC contractors, plumbers and electricians tend to pay higher premiums due to greater loss frequency and severity. Safer trades pay lower rates.
Revenue Size – As revenue grows, so does the typical premium since larger contractors have greater exposure. Rates are set as a percentage of receipts.
Claims History – Contractors with past claims, especially major losses, see increased premiums when policies renew. Too many claims and coverage may be dropped.
Years in Business – New contractors generally pay more for liability coverage until they build experience. Long-time contractors get to take advantage of lower rates.
Risk Transfer – Requiring subcontractors to carry general liability insurance and list you as an additional insured reduces your risk exposure and insurance costs.
Policy Limits – Coverage with higher liability limits costs more but provides greater protection. Lower limits carry more risk.
Deductible Amount – Choosing a higher deductible – the amount you pay out-of-pocket before insurance kicks in – reduces the premiums but increases your share of a loss.
Insurance Company – Rates, experience and risk appetite vary across insurers. Getting multiple quotes ensures you find the best match for your business.
Typical Workers Compensation Insurance Costs
Workers’ compensation insurance covers medical expenses and lost wages for employees who suffer job-related illnesses or injuries. Premiums vary significantly based on risk classification:
| Low | High | Average | |
| Electrician | |||
| – Small | $803 | $1,756 | $1,004 |
| – Medium | $2,258 | $4,968 | $3,011 |
| – Large | $3,513 | $7,778 | $5,018 |
| Plumber | |||
| – Small | $1,349 | $2,951 | $1,686 |
| – Medium | $3,795 | $8,348 | $5,059 |
| – Large | $5,903 | $13,070 | $8,432 |
| Painter | |||
| – Small | $1,470 | $3,215 | $1,837 |
| – Medium | $4,134 | $9,094 | $5,512 |
| – Large | $6,430 | $14,238 | $9,186 |
| Landscaper | |||
| – Small | $864 | $1,890 | $1,080 |
| – Medium | $2,430 | $5,346 | $3,240 |
| – Large | $3,780 | $8,370 | $5,400 |
| Handyman | |||
| – Small | $2,173 | $4,754 | $2,716 |
| – Medium | $6,112 | $13,447 | $8,149 |
| – Large | $9,508 | $21,053 | $13,582 |
| Carpenter | |||
| – Small | $2,345 | $5,130 | $2,932 |
| – Medium | $6,596 | $14,511 | $8,795 |
| – Large | $10,260 | $22,720 | $14,658 |
| General Contractor | |||
| – Medium | $6,518 | $14,259 | $8,148 |
| – Large | $10,185 | $22,407 | $13,580 |
| – XL | $19,012 | $42,098 | $27,160 |
Typical Workers’ Comp Premium Rates by Risk Class in Colorado
| Risk Class | Est. Premium % of Payroll |
|---|---|
| Low-Risk Clerical | 0.5% – 1.5% |
| Medium-Risk Landscaping | 2.5% – 4% |
| High-Risk Roofing | 8% – 15%+ |
Here are some of the key factors impacting workers’ compensation premiums:
Payroll – Payroll directly impacts premiums, as higher payroll equals greater overall risk exposure. Rates are set per $100 of payroll for each risk class.
Risk Class – The type of work performed determines the rate class. Higher risk work has markedly increased rates due to greater claims frequency and cost.
Claims History – Contractors with fewer and less severe prior claims get an ‘experience credit’ on premiums. High claims lead to a surcharge.
Safety Record – Good safety and training programs and an OSHA-compliant job site can qualify contractors for a discounted ‘safety rate’.
Premium Modifier – This compares your actual claims to average expected losses for your risk class. Modifiers >1.0 lead to a surcharge, while <1.0 get a credit.
Subcontractor Coverage – Using uninsured subcontractors raises liability and costs. Requiring subs to carry workers’ comp lowers premiums.
State Rules – Colorado-specific rules around benefits, claims processes, duration caps, and medical costs shape workers’ comp loss patterns and therefore insurer rates.
Deductible – Choosing a higher deductible lowers premiums but increases your out-of-pocket cost per claim.
Insurer – Premiums and risk appetite vary across insurance companies. Get multiple quotes.
Supplementary Insurance Coverages
Beyond general liability and workers’ compensation, common insurance policies secured by Colorado contractors include:
Commercial Auto Insurance
Covers vehicles used for business purposes like work trucks. Typical premiums range from $800 – $4,000 per vehicle annually depending on factors like vehicle type, driver safety records, liability limits carried, etc.
Inland Marine (Contractors Equipment) Insurance
Protects equipment and tools used for contracting work. Typical premiums range from $1,000 to $10,000+ annually for limits between $50,000 to $500,000+. Deductibles of $500 to $2,500 are common.
Builder’s Risk Insurance
Covers construction projects under contract in case of damage prior to completion. Typical premiums range from 0.3% to 2%+ of the completed contract value per project.
Surety Bonds
Required by law for public works and many large-scale projects. Typical rates range from 1-4% of the total bond amount based on personal and business credit history.
Cyber Insurance
Safeguards against data breaches, hacking, and electronic theft. Typical premiums range from $500 – $5,000+ annually depending on revenue size and coverage limits.
Commercial Property Insurance
Protects business properties like offices, warehouses, showrooms and job site trailers from damage. Typical premiums range from $500 to $15,000+ annually depending on property values, location, and extent of coverage.
Commercial Umbrella Insurance
Provides additional liability coverage above general liability and auto policy limits. Typical premiums range from $350 to $5,000+ annually per $1 million in additional coverage.
Key Person Insurance
Covers financial losses if an owner, partner or key employee dies. Typical premiums range from $200 to $1,000+ annually depending on amount of coverage.
Employment Practices Liability
Protects against employee discrimination, harassment, or wrongful termination lawsuits. Typical premiums range from $1,500 to $7,500+ depending on revenue, risk factors, and chosen coverage limits.
Partnering With ContractorNerd.com
Are you a Colorado contractor seeking to protect your business and its future? Look no further than ContractorNerd.com. We understand the unique risks contractors face and are dedicated to providing customized insurance solutions.
Why Choose ContractorNerd.com?
1. Specialized Expertise – Our network focuses exclusively on contractor insurance, ensuring deep understanding of your industry’s unique risks and needs.
2Top Insurance Markets – Over the years we’ve cultivated partnerships with leading insurers, giving you access to top-rated coverage.
3. Cost-Effective Solutions – Our specialists advise on potential gaps and cost-saving opportunities to optimize protection without overpaying.
Don’t leave your business exposed. Partnering with ContractorNerd.com ensures you make a smart investment to safeguard your company’s future. Get a free quote today and take the first step towards comprehensive and cost-effective contractor insurance in Colorado.