For construction companies in Connecticut, having the right insurance is crucial for protecting your business. As a contractor, you face diverse risks ranging from property damage and employee injuries to lawsuits and cyber attacks. Purchasing adequate, cost-effective insurance tailored to your operations can safeguard your assets and future.
This guide will uncover insurance costs for Connecticut contractors across popular policies like general liability, workers’ compensation, bonds, equipment coverage, and more. We’ll explore the key variables impacting your premiums, provide benchmarking data for small, medium and large contractors, and suggest strategies to secure favorable rates.
Understanding typical contractor insurance expenses in Connecticut allows you to evaluate policies suitable for your business. While your exact premiums depend on your unique attributes, this data offers helpful context to inform smart insurance decisions.
Connecticut’s contracting landscape requires thorough protection. Contractors general liability insurance is crucial for risk management. Our guide on contractors workers comp safeguards your workforce. Our comprehensive guide to building contractors insurance options offers valuable insights.
Key Factors Influencing Insurance Costs for Contractors
Here are some key factors that can influence insurance costs for contractors:
– Type of work – The type of contracting work being done (construction, plumbing, electrical, etc.) impacts risk and therefore insurance rates. Higher risk work typically has higher insurance premiums. Roofing, demolition, grading, and exterior work tend to have elevated risk.
– Years in business – Contractors who are new to the business often pay higher premiums until they establish a track record over 3-5 years. Insurance companies view experience as an indicator of lower risk. New business policies may be required.
– Claims history – Prior claims made by a contractor will often result in increased premiums, especially if the claims were frequent or costly. Too many claims can make a contractor uninsurable. A clean claims history helps lower rates.
– Coverage limits – Higher levels of coverage for things like general liability or workers’ compensation mean higher premiums. Contractors must weigh the cost vs the amount of protection needed for their business. Minimum limits are required.
– Number of employees – More employees on payroll increases the risk exposure for things like workers’ comp. Rates will be higher as a result. A minimum # of employees may be required for workers’ comp.
– Safety record – Contractors with poor safety records or OSHA violations can expect to pay higher premiums. Proactive safety reduces risk. Experience Mods are used to measure safety.
– Business size – Larger contracting firms often get better rates based on economies of scale and broader risk distribution. Smaller firms pay more.
– Insurance provider – Rates can vary significantly between insurance companies. Competitive bidding is wise. AM Best ratings determine financial strength.
The key is to maintain excellent records, safety practices, qualifications, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premiums.
Small, Medium, Large Contractor Benchmarking in Connecticut
The table below displays our definition for small, medium and large contractors in Connecticut alongside typical insurance coverages. This helps provide you with a general benchmark to 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 like location, services, safety record, number of employees and vehicles, payroll, and revenue. Contractors who secure tailored coverage with quality carriers and favorable terms may achieve rates well below the averages and toward the lower end of the ranges we provide in the benchmarking that follows.
If in doubt, we encourage you to explore your program with our network of highly skilled and specialized brokers. The brokers in our network specialize in helping contractors realize savings by accessing the right carriers and tailoring coverage to the specific contractor business.
General Liability Insurance Costs in Connecticut
General liability, also known as contractor’s liability, protects your business if a third party alleges property damage or bodily injury caused by your construction operations. It covers legal defense costs and settlements up to the policy limits.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,400 | $2,600 | $1,900 |
| – Medium | $4,200 | $9,000 | $5,600 |
| – Large | $7,900 | $16,700 | $10,600 |
| Plumber | |||
| – Small | $5,700 | $9,975 | $7,500 |
| – Medium | $16,400 | $25,500 | $20,500 |
| – Large | $34,300 | $56,400 | $47,300 |
| Painter | |||
| – Small | $2,000 | $3,500 | $2,500 |
| – Medium | $3,600 | $9,400 | $6,900 |
| – Large | $5,800 | $21,500 | $14,400 |
| Landscaper | |||
| – Small | $1,924 | $3,539 | $2,700 |
| – Medium | $4,863 | $10,780 | $7,700 |
| – Large | $7,867 | $23,684 | $15,700 |
| Handyman | |||
| – Small | $3,000 | $6,500 | $4,900 |
| – Medium | $10,700 | $16,050 | $13,900 |
| – Large | $20,000 | $36,500 | $28,700 |
| Carpenter | |||
| – Small | $2,600 | $7,100 | $4,100 |
| – Medium | $9,200 | $15,600 | $12,100 |
| – Large | $17,100 | $35,700 | $26,000 |
| General Contractor | |||
| – Medium | $7,400 | $18,700 | $10,400 |
| – Large | $8,700 | $24,800 | $15,700 |
| – XL | $35,300 | $83,600 | $52,300 |
Typical general liability premiums for Connecticut contractors range from 1% to 5%+ of revenue for $1 million per occurrence limits:
| Contractor Revenue | Est. Premium Range |
|---|---|
| $150,000 | $1,500 – $7,500 |
| $500,000 | $5,000 – $25,000 |
| $1 million | $10,000 – $50,000 |
| $2.5 million | $25,000 – $125,000 |
General liability policies commonly exclude coverage for pollution, asbestos, prior work, contractual liability, and professional services. Higher limits, lower deductibles, and expanded coverage increase premiums.
Key factors that influence general liability insurance costs for Connecticut contractors:
– Type of work – Certain types of contracting work like roofing, plumbing, and electrical work are seen as higher risk and thus have higher premiums. More hazardous work leads to higher liability costs.
– Revenues – Contractors with higher annual revenues have greater exposure and will generally pay more for liability coverage. Revenue is used as a proxy for business size and risk level.
– Claims history – Contractors with past claims filed against them will see increased premiums, especially if claims were frequent or costly. Too many claims can mean no coverage.
– Experience – Newer contractors are viewed as higher risk and will pay more until they establish a solid track record, usually at least 5 years in business. More experience means lower rates.
– Risk transfer – Requiring subs to carry GL insurance and clients to sign liability waivers lowers the contractor’s liability risk and premiums.
– Policy limits – Higher liability limits mean higher premiums, but lower limits may expose you to personal liability if claims exceed limits. Minimum $1M per occurrence limits are typical.
– Deductibles – Choosing a higher deductible, the amount you pay on a claim before insurance kicks in, can significantly reduce premiums.
– Insurance company – Premiums can vary amongst insurers based on financial strength, service, and pricing. It pays to shop around.
Workers Compensation Insurance Costs in Connecticut
Workers’ compensation covers employee injuries, medical treatment, lost wages, and rehabilitation services caused by work activities. For contractors, premiums can range significantly based on risk factors.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,734 | $3,793 | $2,167 |
| – Medium | $4,876 | $10,728 | $6,502 |
| – Large | $7,585 | $16,796 | $10,836 |
| Plumber | |||
| – Small | $3,026 | $6,620 | $3,783 |
| – Medium | $8,512 | $18,726 | $11,349 |
| – Large | $13,240 | $29,318 | $18,915 |
| Painter | |||
| – Small | $3,107 | $6,797 | $3,884 |
| – Medium | $8,739 | $19,226 | $11,652 |
| – Large | $13,594 | $30,101 | $19,420 |
| Landscaper | |||
| – Small | $2,072 | $4,533 | $2,590 |
| – Medium | $5,828 | $12,821 | $7,770 |
| – Large | $9,065 | $20,073 | $12,950 |
| Handyman | |||
| – Small | $6,339 | $13,866 | $7,924 |
| – Medium | $17,828 | $39,222 | $23,771 |
| – Large | $27,733 | $61,408 | $39,618 |
| Carpenter | |||
| – Small | $5,341 | $11,683 | $6,676 |
| – Medium | $15,021 | $33,046 | $20,028 |
| – Large | $23,366 | $51,738 | $33,380 |
| General Contractor | |||
| – Medium | $19,018 | $41,601 | $23,772 |
| – Large | $29,715 | $65,373 | $39,620 |
| – XL | $55,468 | $122,822 | $79,240 |
Here are typical workers’ compensation premiums as a percentage of payroll for Connecticut contractors:
| Payroll | Est. Premium % of Payroll |
|---|---|
| $150,000 | 10% – 20% |
| $500,000 | 8% – 15% |
| $1 million | 6% – 12% |
| $2.5 million | 4% – 10% |
At a 10% rate, a contractor with a $500,000 payroll would pay $50,000 annually for workers’ compensation insurance. Payroll, job type, claims history, company size, and other factors determine final rates.
Workers’ compensation policies have no deductibles. Coverage is compulsory for employers in CT. Exclusions may apply to owner family members, some subcontractors, and out of state employees.
Key factors that influence workers’ compensation insurance costs for Connecticut contractors:
– Payroll – Payroll directly impacts premiums. Higher payroll equals higher premiums. Accurate payroll audits are performed.
– Job classification – The type of work performed is classified by risk level. Carpentry has lower rates than roofing for example. Office work is lower risk than construction.
– Experience rating – Your claims history results in an experience rating (mod factor) that can lower or raise premiums. High claims lead to higher rates.
– Industry trends – Premium rates for the construction industry as a whole influence costs. Frequency and severity of claims impact rates.
– Safety record – Good safety and low injury rates can qualify contractors for premium discounts. Poor safety leads to increased premiums.
– Subcontractors – Using uninsured subcontractors increases premiums. Requiring subs to carry WC lowers contractor risk and costs.
– State laws – CT benefit levels, discounts, and other regulations impact local premiums and costs. State rate mandates affect pricing.
– Deductibles – Higher deductibles lower WC premiums but increase your per claim costs. Often not advantageous due to high benefit levels.
– Insurance company – Premiums can vary based on insurer reputation, stability, service, and pricing. A financially strong carrier may offer lower pricing.
Overview of Additional Contractor Insurance Coverages
Beyond general liability and workers’ compensation, Connecticut contractors commonly require several supplemental insurance policies:
Commercial Auto Insurance
Covers vehicles used for business purposes like company trucks. Protects against collision damage and bodily injury claims. Typical premiums range from $1,000 – $3,000 per vehicle.
Inland Marine (Contractors Equipment) Insurance
Protects owned equipment and tools against theft and damage. Useful for contractors with expensive equipment. Typical premiums range from $1,000 – $5,000 annually for $10,000 to $25,000 in coverage.
Surety Bonds
Required by law for public works projects. Also helps demonstrate financial stability. Typical premiums range from 1-3% of the bond amount based on personal and business credit factors.
Commercial Property Insurance
Covers damage to business properties like offices, warehouses, and job site trailers. Protects against perils like fire, wind, and theft. Typical premiums range from $1,000 – $10,000 annually.
Business Owner’s Policy (BOP
Packages property and liability coverages together. Simplifies purchasing insurance. Typical premiums range from $2,000 – $10,000 annually.
Employment Practices Liability
Defends against wrongful termination, discrimination, sexual harassment and other employment lawsuits. Typical premiums range from $2,000 – $5,000 annually.
Cyber Liability Insurance
Responds to data breaches, computer hacking, and electronic theft involving contractor systems. Typical premiums range from $500 – $2,000 annually.
Umbrella Liability Insurance
Provides extra liability limits above general liability and auto insurance. Added protection from major claims. Typical premiums range from $750 – $1,500 annually per $1 million in extra coverage.
Pollution Liability
Covers third-party bodily injury and property damage claims from pollution releases. Important for environmental contractors. Typical premiums range from $2,000 – $10,000 annually.
Builder’s Risk Insurance
Protects construction projects against damage during construction. Typically arranged on a per project basis. Premiums vary by size of project.
Proper insurance portfolio construction for contractors involves weighing coverage needs against costs. It is wise to work with an insurance agent or broker who understands contractor risks.
Finding the Right Connecticut Contractor Insurance
Finding the right insurance for your contracting business requires careful consideration of the specific risks you face and your risk tolerance. It pays to work with an agent or broker who specializes in contractor insurance.
The contractor insurance specialists at ContractorNerd.com follow these best practices to help secure ideal coverage at competitive pricing:
– Ask detailed questions to understand your business and exposures
– Review portfolios annually to avoid gaps in coverage
– Benchmark your costs to industry averages
– Prioritize insurer financial strength
– Require A+ rated insurance carriers
– Submit applications to multiple top insurers
– Negotiate costs by optimizing deductibles and limits
– Offer premium financing options for affordable payments
– Provide superior service through the policy term
– Assist with certificate requests and policy audits
– Report claims quickly and liaise with adjusters
– Advise on risk control and safety best practices
Connecticut Contractor Insurance with ContractorNerd.com
Are you a contractor looking to protect your business and secure its future? Look no further than ContractorNerd.com, your dedicated partner in contractor insurance. We understand the unique risks your business faces and are committed to providing you with the best insurance solutions tailored to your specific needs.
Why Choose ContractorNerd.com?
1. Specialized Expertise When it comes to contractor insurance, one size does not fit all. Our network of insurance specialists focuses exclusively on contractors. We know the challenges you face, and we’re here to help you navigate them. Our dedicated expertise sets us apart.
2.Access to Top Markets Over the years, we have cultivated strong partnerships with leading insurance carriers like The Hartford, Travelers, CNA, and Liberty Mutual. This provides you with extensive market access for tailored coverage options. Our connections get you the right coverage at the right price.
3. Cost-Effective Solutions Our goal is to optimize your insurance portfolio so you get the most protection per premium dollar spent. We not only find you the right insurance but also advise on potential gaps and cost-saving adjustments. We help you control costs without sacrificing quality coverage.
Conclusion
We hope this guide provides useful benchmarks and information to help inform your contractor insurance decisions. Your business is too important to leave exposed to risk. At ContractorNerd.com, our insurance specialists are here to answer your questions and make sure you get insurance that meets your business needs. Contact us today to discuss how we can help protect what you have built.