Operating a construction business comes with substantial financial risks and liabilities. As a contractor in Delaware, having adequate insurance tailored to your specific operations is crucial for properly protecting your company’s finances and future.
This detailed guide explores typical contractor insurance costs across Delaware. We’ll look at common premium ranges across core policies like General Liability, Workers’ Compensation, Commercial Auto, Inland Marine, and more.
Understanding typical insurance expenses in your state provides helpful context as you evaluate policies and coverage suitable for your unique business. While your exact premiums will vary based on your particular attributes and risk profile, this data offers useful industry benchmarking and perspective.
Delaware contractors need robust insurance solutions. General liability insurance contractor policies are essential for protection. Navigating contractors workers compensation ensures compliance and safety. For a thorough examination of business insurance for contractors, consult our expert resources.
Key Factors That Influence Contractor Insurance Costs
There are a number of major factors that can influence the insurance premiums paid by contractors in Delaware. Being aware of these key variables and how they impact the costs of policies can help you make smart decisions when structuring your insurance program.
Type of Work
The type of contracting work being performed is a major driver of premiums. Certain high-risk trades like roofing, electrical work, and plumbing tend to have much higher insurance rates compared to lower hazard contractors. Underwriters classify contractors into risk categories, so businesses performing more dangerous activities face steeper insurance costs.
Years in Business
The length of time a contractor has been operating also impacts premiums. New businesses are considered higher risk and tend to pay more for insurance until they build up experience, qualifications, safety track records, and credibility. Contractors who have been in business for many years tend to get lower rates.
Revenue Size
A contractor’s annual revenue directly impacts premiums. Businesses with higher gross revenues have greater risk exposure. Higher revenue is associated with larger jobs, payroll, equipment inventories, and subcontractor liability. As such, larger contractor revenue typically equates to higher insurance costs.
Number of Employees
The number of employees on a contractor’s payroll can significantly influence the costs of policies like Workers’ Compensation. More employees means greater exposure risk for claims. Certain insurance coverages directly tie into payroll size.
Location in Delaware
Insurance rates can vary depending on where in Delaware a contractor bases their operations. Costs are typically higher in urban centers compared to more rural areas. Geographic location definitely influences a contractor’s risk profile.
Claims History
If a contractor has filed frequent claims or past claims with high severity under policies, their premiums will reflect that. Too many insurance claims will substantially increase costs. Sometimes excessive claims may even result in non-renewal of coverage. Maintaining a clean claims history helps lower insurance rates.
Safety Record
Contractors with poor safety records, workplace injuries, OSHA violations or lack of safety programs often pay higher premiums. Proactively managing workplace safety helps reduce risks and is rewarded with discounted premiums by some insurers. Prioritizing safety pays dividends far beyond lower insurance costs.
Deductible Amount
Choosing a higher deductible is one way contractors can reduce policy premiums, but it comes with trade-offs. While higher deductibles lower annual costs, they mean the contractor takes on greater out-of-pocket costs for each claim before coverage kicks in. Contractors should model different deductible scenarios to find the optimal balance.
Insurance Provider
Insurance rates can vary significantly between providers. Each company assesses risks differently, leading to major differences in pricing. Like many services, insurance tends to reflect the age-old adage “you get what you pay for”. Cut-rate insurers may be cheaper but provide inferior coverage and claims service. It pays to partner with reputable insurers.
Typical Contractor Business Sizes in Delaware
To provide helpful context around contractor insurance, below are some typical size definitions and employee counts that fall under small, medium and large contractors in the Delaware marketplace:
| 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 |
Of course, there can be variation and businesses that fall outside these ranges. However, understanding typical revenue and employee sizes provides perspective when evaluating your business compared to broader industry benchmarks.
Core Insurance Policies for Contractors
There are several standard insurance policies that nearly every contractor needs for adequate protection. The costs of these core coverages vary significantly based on the factors discussed earlier. Below we explore typical premium ranges:
General Liability Insurance
General Liability (GL) covers legal defense costs and settlements if customers allege bodily injury, property damage or negligence resulting from your contracting work. It protects against customer lawsuit claims.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,200 | $2,100 | $1,700 |
| – Medium | $3,700 | $6,900 | $4,700 |
| – Large | $5,800 | $12,700 | $8,700 |
| Plumber | |||
| – Small | $5,700 | $9,975 | $6,600 |
| – Medium | $12,600 | $20,200 | $17,200 |
| – Large | $21,100 | $46,600 | $34,900 |
| Painter | |||
| – Small | $2,100 | $4,600 | $2,800 |
| – Medium | $3,900 | $9,900 | $7,400 |
| – Large | $6,300 | $21,900 | $14,100 |
| Landscaper | |||
| – Small | $1,238 | $3,904 | $2,400 |
| – Medium | $1,935 | $10,816 | $6,100 |
| – Large | $2,840 | $20,090 | $11,000 |
| Handyman | |||
| – Small | $2,000 | $6,600 | $4,800 |
| – Medium | $6,500 | $14,300 | $11,500 |
| – Large | $12,000 | $33,800 | $24,400 |
| Carpenter | |||
| – Small | $2,000 | $6,400 | $3,900 |
| – Medium | $6,800 | $14,200 | $10,700 |
| – Large | $12,400 | $31,400 | $22,000 |
| General Contractor | |||
| – Medium | $5,600 | $13,400 | $8,100 |
| – Large | $11,900 | $23,200 | $16,200 |
| – XL | $29,700 | $72,800 | $48,700 |
Typical General Liability Premiums
Small Contractors: $1,000 – $5,000
Medium Contractors: $5,000 – $25,000
Large Contractors: $25,000 – $100,000+
Major Factors Impacting GL Premiums
– Type of contracting work performed
– Annual revenues
– Claims history
– Risk transfer to subcontractors
– Policy limits
– Deductible amount
– Insurer pricing
Workers’ Compensation Insurance
Workers’ Compensation insurance pays for employee injuries, medical treatment, lost wages and rehabilitation resulting from job-related accidents or illnesses. It covers costs related to workplace safety.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,328 | $2,905 | $1,660 |
| – Medium | $3,735 | $8,218 | $4,981 |
| – Large | $5,811 | $12,867 | $8,301 |
| Plumber | |||
| – Small | $2,385 | $5,217 | $2,981 |
| – Medium | $6,708 | $14,757 | $8,944 |
| – Large | $10,434 | $23,105 | $14,906 |
| Painter | |||
| – Small | $2,589 | $5,664 | $3,237 |
| – Medium | $7,283 | $16,022 | $9,711 |
| – Large | $11,329 | $25,085 | $16,184 |
| Landscaper | |||
| – Small | $1,688 | $3,693 | $2,110 |
| – Medium | $4,748 | $10,445 | $6,330 |
| – Large | $7,385 | $16,353 | $10,550 |
| Handyman | |||
| – Small | $3,274 | $7,163 | $4,093 |
| – Medium | $9,209 | $20,260 | $12,279 |
| – Large | $14,325 | $31,720 | $20,465 |
| Carpenter | |||
| – Small | $2,716 | $5,942 | $3,395 |
| – Medium | $7,639 | $16,806 | $10,186 |
| – Large | $11,883 | $26,313 | $16,976 |
| General Contractor | |||
| – Medium | $9,823 | $21,488 | $12,279 |
| – Large | $15,349 | $33,767 | $20,465 |
| – XL | $28,651 | $63,442 | $40,930 |
Typical Workers’ Compensation Premiums
Small Contractors: $5,000 – $25,000
Medium Contractors: $25,000 – $100,000
Large Contractors: $100,000 – $500,000+
Major Factors Impacting Workers’ Comp Premiums
– Payroll size
– Employee job classifications
– Experience rating/loss history
– Workplace safety programs
– Industry trends
– Policy deductible
– Use of subcontractors
Commercial Auto Insurance
Commercial Auto Insurance covers vehicles used for business purposes like trucks, vans and cars. Typical annual premiums range widely:
Per Vehicle: $500 – $3,000
The type of vehicle, use, driver safety records and coverage limits impact auto premiums significantly. Many contractors choose higher deductibles for collision and comprehensive coverage to reduce costs.
Inland Marine (Contractors Equipment)
Inland Marine insurance covers equipment and tools used for contracting work. Coverage applies whether the equipment is on your business premises, in a vehicle, at a job site or in transit.
Typical Premiums:
Small Contractors: $500 – $2,500
Medium Contractors: $2,500 – $10,000
Large Contractors: $10,000 – $25,000
Inland Marine premiums vary based on the value of equipment being covered, desired policy limits, deductibles and the security of your storage.
Additional Contractor Insurance Coverages
Beyond the core insurance policies discussed above, many medium and larger contractors in Delaware require supplemental insurance coverages:
Surety Bonds
Most government and public works projects require contractors obtain Surety Bonds, which guarantee your performance and payment. Typical premiums range from 1-3% of the bond amount based on financial strength.
Builder’s Risk Insurance
Builder’s Risk insurance covers construction projects while still under construction. Premiums typically range from 0.3% – 1% of the completed value of the project.
Cyber Liability Insurance
Cyber Liability protects against losses and expenses stemming from data breaches, ransomware attacks or electronic theft. For small businesses, annual premiums cost $500 – $2,000.
Professional Liability
Professional Liability Insurance (aka Errors & Omissions) covers damages if your work is found to be faulty or negligent. Annual premiums for contractors typically cost between $2,500 – $7,500.
Pollution Liability
For environmental remediation contractors, Pollution Liability insurance protects against bodily injury and property damage resulting from pollutants. Premiums range from $5,000 – $50,000.
Finding the Best Delaware Contractor Insurance
Shopping insurance for contractors can be daunting given the various moving pieces. Costs range widely based on your unique risk attributes. Optimizing coverage while achieving cost savings requires experience and expertise.
That’s where working with ContractorNerd.com provides important benefits. Our dedicated team specializes exclusively in contractor insurance. We leverage our focused expertise to simplify insurance:
Specialized Knowledge Our network is comprised of insurance advisors focused on contractors. We understand your business and the coverages you need.
Access to Leading Insurance Markets – Over the years we have cultivated partnerships with top national and regional insurance carriers. This provides our clients the best coverage options.
Cost-Effective Coverage – Our specialists advise on potential gaps and savings opportunities to help tailor protection without overpaying.
We take pride in helping contractors across Delaware make smart insurance decisions that protect their livelihood while achieving cost savings. Don’t leave your business exposed to risk. Partner with the experts at ContractorNerd.com to secure your future.
Get a free insurance review and price quote for your business easily online. Take control of your contractor insurance needs today.