A Comprehensive Guide on Costs and Savings Strategies

For construction companies in Hawaii, 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 detailed guide will uncover insurance costs for Hawaii 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 Hawaii 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.

Hawaiian contractors need to have the appropriate contractor insurance to operate legally in the state. This typically includes general liability insurance for contractors to protect against third-party claims and workers’ compensation coverage for contractors to cover employee injuries on the job.

Key Factors Influencing Insurance Costs for Contractors

Here are some of the main factors that can influence insurance costs for contractors in Hawaii:

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, electrical, and plumbing contractors tend to pay more than other trades.

Years in business – Contractors who are new to the business often pay higher premiums until they establish a track record over several years. Insurance companies view experience as an indicator of lower risk. New contractors are deemed higher risk.

Claims history – Prior claims made by a contractor will often result in increased premiums at renewal. Too many claims or large losses can make a contractor uninsurable. A clean claims history helps lower rates.

Coverage limits – Higher levels of coverage for policies like general liability or workers’ compensation mean higher premiums. Contractors must weigh the cost versus the amount of protection needed when selecting limits. 

Number of employees – More employees on the payroll increases the overall risk exposure for things like workers’ compensation. Rates will trend higher as the contractor’s employee count rises.

Safety record – Contractors with poor safety records or OSHA violations can expect to pay higher premiums. Those who are proactive about safety may qualify for discounts. Safety directly impacts risk.

Business size – Larger contracting firms often qualify for lower insurance rates based on economies of scale and broader risk distribution. Small contractors with less bargaining power tend to pay more.

Insurance provider – Rates can vary 20% or more between insurance companies. This is why shopping coverage and comparing quotes is important to find savings.

Deductibles – Choosing higher deductibles, which reduce premiums but increase out-of-pocket costs, is a common way contractors realize insurance savings.

The key is to maintain excellent records, safety practices, qualifications, experience, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premium expenses.

Benchmarking Insurance Costs for Hawaii Contractors 

To give you a general idea of typical contractor insurance costs in Hawaii, here is some benchmark data for small, medium, large, and extra-large contractors:

Contractor Business Size

CriteriaSmall ContractorMedium ContractorLarge ContractorXL Contractor
Worth of Tools$5K$10K$25K$50K
General LiabilityYesYesYesYes
Workers’ CompYesYesYesYes
Commercial AutoYesYesYesYes
Inland MarineYesYesYesYes
Hawaii Average Total Insurance Premium

Typical Insurance Coverages

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 below these averages.

If in doubt, we encourage you to have an expert review your program. The brokers in our network specialize in helping contractors realize savings by providing access to the right carriers and coverage.

General Liability Insurance Costs in Hawaii

Hawaii Average Premiums for General Liability

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 compensatory damages you become legally obligated to pay. 

– Small$600$1,100$900
– Medium$1,500$3,700$2,600
– Large$3,500$7,500$5,500
– Small$4,500$7,875$4,600
– Medium$10,200$15,900$13,100
– Large$14,300$31,800$23,000
– Small$1,500$2,625$1,800
– Medium$3,400$6,000$4,700
– Large$6,800$11,900$9,400
– Small$1,693$2,963$1,900
– Medium$5,645$8,468$6,500
– Large$11,290$14,677$11,300
– Small$1,700$3,200$2,600
– Medium$4,100$10,600$7,300
– Large$9,700$21,100$15,400
– Small$2,300$4,025$2,400
– Medium$4,400$8,900$6,700
– Large$9,200$17,800$13,500
General Contractor
– Medium$4,500$6,750$4,600
– Large$6,600$9,400$8,400
– XL$14,400$23,400$18,900

For Hawaii contractors, typical general liability premiums range from about 1% to 5% or more of annual revenue for $1 million per occurrence limits. Umbrella liability can provide additional layers of coverage above the general liability policy limits.

Hawaii Contractor General Liability Premiums

Small Contractor – $1,500 to $7,500+ annually   

Medium Contractor – $5,000 to $25,000+ annually  

Large Contractor – $10,000 to $50,000+ annually

XL Contractor – $25,000 to $125,000+ annually

Key Factors That Influence General Liability Insurance Costs

– Type of work – Certain contracting trades like roofing, plumbing, and electrical are seen as higher risk and have higher premiums. The more hazardous the work, the higher the liability costs.

– Annual revenues – Contractors with higher revenues pay more for liability insurance since they have greater overall risk exposure. Insurers use revenue to gauge a business’s size.

– Claims history – Contractors with past claims against them will see increased premiums, especially after large losses. Too many claims makes contractors uninsurable over time.

– Years in business – New contractors are deemed higher risk and will pay more until they build experience over several years. Established contractors tend to get better rates.

– Risk transfer – Requiring subs to carry GL insurance and getting certificates of insurance helps transfer risk off the contractor’s policy, reducing premiums.

– Policy limits – Higher liability limits mean higher premiums, but lower limits may expose contractors to uncovered losses if claims exceed limits.

– Deductibles – Choosing a higher deductible, which is the amount the contractor pays on a claim before the insurance kicks in, can significantly reduce premiums.

– Insurance company – The financial strength, reputation, and level of competition among insurers influences pricing on liability insurance for contractors.

Workers Compensation Insurance Costs in Hawaii

Hawaii Average Premiums for Workers Compensation

Workers’ compensation insurance covers employee injuries, illnesses, and fatalities that happen as a result of their job duties. It pays for medical expenses, lost wages, rehabilitation costs, and death benefits to dependents.

– Small$2,392$5,231$2,989
– Medium$6,726$14,798$8,968
– Large$10,463$23,168$14,947
– Small$3,187$6,971$3,983
– Medium$8,962$19,717$11,950
– Large$13,941$30,870$19,916
– Small$2,090$4,572$2,612
– Medium$5,878$12,931$7,837
– Large$9,143$20,245$13,062
– Small$1,936$4,235$2,420
– Medium$5,445$11,979$7,260
– Large$8,470$18,755$12,100
– Small$4,674$10,225$5,843
– Medium$13,146$28,921$17,528
– Large$20,450$45,281$29,214
– Small$3,690$8,071$4,612
– Medium$10,377$22,830$13,836
– Large$16,142$35,743$23,060
General Contractor
– Medium$14,023$30,676$17,529
– Large$21,911$48,205$29,215
– XL$40,901$90,567$58,430

Hawaii ranks among the most expensive states for workers’ comp for contractors and other businesses. Premiums can vary significantly based on risk factors. 

Hawaii Contractor Workers’ Comp Premiums

Small Contractor – $2,000 to $7,500+ annually   

Medium Contractor – $10,000 to $25,000+ annually

Large Contractor – $25,000 to $75,000+ annually

XL Contractor – $50,000 to $250,000+ annually 

What Influences Workers’ Comp Insurance Costs

Payroll – The total payroll and number of employees factor into premium calculations. Higher payroll equals higher premiums.

Class code – The work employees perform is assigned a risk class code. Higher risk work has higher premium rates.

Experience rating – Contractors are graded on past loss history. Fewer/lower claims get an ‘experience credit’ reducing premiums. High claims lead to an ‘experience debit’ increasing premiums.

Industry trends – When industry-wide claim frequency and severity rise, rates rise. When industry losses decline, so do workers’ comp rates.

Safety – Contractors with strong safety programs and low injury rates can get premium discounts for being ‘safety certified’. Poor safety leads to increased premiums.

Subcontractors – Using uninsured subs means the contractor’s policy must pick up exposure. Requiring subs to carry their own workers’ comp lowers the contractor’s risk and premium.

State laws – Hawaii workers’ comp laws impact benefits, rate-setting, and premium discounts. These variables directly influence costs for Hawaii contractors.

Deductible program – Higher deductibles lower premiums but increase out-of-pocket costs for each claim. Tradeoff must be evaluated.

Insurer – The financial strength, service, expertise, and pricing of the insurance carrier impacts overall workers’ comp costs. 

Additional Contractor Insurance Coverages 

Beyond general liability and workers’ compensation, contractors in Hawaii need supplemental insurance policies to address other risks:

Commercial Auto Insurance

Covers vehicles used for business purposes. Typical premiums range from $1,500 – $4,000 per vehicle depending on factors like vehicle type, radius, driver safety, and more.

Inland Marine (Tools & Equipment) Insurance

Protects tools, equipment, machinery, and contractor-owned materials from theft and damage. Useful for projects away from the shop. Typical premiums range from $1,500 – $5,000+ annually for $15,000 to $50,000 in coverage limits.

Surety Bonds 

Required bid, performance and payment bonds for public works and many projects. Typical premiums range from 1-3% of the total bond amount based on the contractor’s financial strength and credit profile.

Builder’s Risk Insurance

Covers construction projects and properties while under construction. Protects against damage from causes like fire, theft, vandalism. Typical premiums range from 0.3% to 3%+ of the completed value of the project.

Commercial Property Insurance 

Safeguards permanent business properties like offices, warehouses, showrooms, and storage yards. Typical premiums range from $2,000 – $20,000+ annually based on property values, location, and safety features.

Employment Practices Liability Insurance

Defends against employment-related lawsuits and claims around discrimination, harassment, wrongful termination, etc. Typical premiums range from $2,500 – $7,500+ annually depending on number of employees.

Cyber/Data Breach Insurance 

Responds to hacking incidents, data breaches, and electronic theft. Pays costs around notification, forensics, legal services, fines, and PR. Typical premiums range from $1,000 – $5,000+ annually depending on sales and data storage.

Business Interruption Insurance

Replaces income lost due to covered losses that halt operations like natural disasters, fires, accidents. Typical premiums range from $1,000 – $20,000+ depending on business size and coverage terms.

Umbrella Liability Insurance 

Provides additional liability limits above primary policies like general liability and auto. Added peace of mind. Typical premiums range from $1,000 to $2,000+ annually per $1 million in extra coverage.

Partner with ContractorNerd.com for Hawaii Insurance

Finding the right insurance for your contracting business in Hawaii can be challenging. There are lots of variables to weigh from coverage types to limits and deductibles. You want adequate protection tailored to your risks at competitive rates. 

That’s where working with ContractorNerd.com offers key advantages:

Specialized Expertise – Our network of insurance advisors focuses exclusively on contractor businesses. They understand the unique risks you face and how to properly insure them.

Access to Top Insurance Markets – We’ve cultivated relationships with A-rated national and regional insurance carriers. This provides you with a broad range of coverage options from trusted providers.

Cost-Effective Coverage – Our advisors work as your advocate to find tailored solutions that meet your specific needs at competitive prices. They can advise you on how to optimize your insurance investment.

Don’t leave your Hawaii contracting business exposed and at risk. Partnering with ContractorNerd.com ensures you are making a smart investment that secures your company’s future.

Get an insurance review and personalized quote for your business today! Our team is here to provide the expertise and guidance you need to safeguard your assets in a cost-effective way.