Operating a construction business in Maine involves significant risks and insurance responsibilities. Having adequate, cost-effective contractor insurance tailored to your operations is crucial for protecting your company, assets and future.
This comprehensive guide will uncover typical insurance costs for Maine contractors across common policies like general liability, workers’ compensation, surety bonds, equipment coverage and more. We’ll explore the key factors impacting your premiums, provide benchmarking examples for small, medium and large contractors, and suggest strategies to secure favorable rates.
Understanding typical insurance expenses in Maine allows you to evaluate policies appropriate for your contracting business. While your exact premiums depend on your unique traits, this data offers helpful context to inform smart insurance decisions.
Maine’s diverse construction landscape requires comprehensive coverage. A comprehensive look at liability insurance for contractors protects against third-party claims. Contractor workers compensation insurance is essential for employee protection. For a full spectrum of insurance for contractors options, consult our expert resources.
Key Factors Influencing Insurance Costs
Numerous important factors can influence insurance costs for contractors in Maine:
Type of Work – Certain contracting professions like roofing, plumbing, electrical, and exterior work are viewed as higher risk and thus have higher insurance rates. More hazardous construction activities lead to increased premiums.
Years in Business – Contractors who are new to the business often pay higher premiums until they establish a solid track record over time. Insurance companies view experience as an indicator of lower risk.
Claims History – Prior claims made against a contractor will typically result in increased premiums, especially if the claims were particularly large or frequent. Too many claims can even make a contractor uninsurable. A clean claims history helps lower rates.
Coverage Limits – Higher levels of coverage for policies like general liability insurance or workers’ compensation come with higher premiums. Contractors must weigh the cost versus the amount of protection desired.
Number of Employees – Having more employees on your payroll increases the risk exposure primarily for workers’ compensation insurance. More employees means higher premiums.
Safety Record – Contractors with poor safety records, OSHA violations or work-related incidents can expect to pay higher premiums. Proactive safety helps reduce risk.
Business Size – In general, larger contracting firms with more revenue and payroll increase their overall risk exposure. But size can also lead to volume discounts. Small firms pay more.
Insurance Provider – Rates offered by insurance companies vary widely at times. Competitive bidding is wise to find suitable rates.
The key is to maintain excellent records, safety practices, trade qualifications, risk transfer, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premiums.
Small, Medium, Large Contractor Examples
Here are some examples of hypothetical small, medium and large contractors in Maine to provide context on typical insurance coverages purchased and premium ranges:
| 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 risk attributes like location, services, safety record, number of employees and vehicles, payroll size, and annual revenue. Contractors who secure tailored coverage with reputable carriers and favorable terms may achieve rates well below the averages and toward the lower end of the ranges we provide in the benchmarking data that follows.
If in doubt, we encourage you to have an expert review your program. Specialized insurance brokers can help contractors realize potential savings by accessing the right carriers and optimizing coverage to your operations.
General Liability Insurance
General liability, also known as CGL, protects your contracting business in the event a third party alleges property damage or bodily injury caused by your construction operations or employees.
Typical general liability premiums for contractors range from 1% to 5% or more of annual revenue depending on specific risk factors.
| Low | High | Average | |
| Electrician | |||
| – Small | $800 | $2,200 | $1,300 |
| – Medium | $2,900 | $4,800 | $3,700 |
| – Large | $5,900 | $10,300 | $7,300 |
| Plumber | |||
| – Small | $4,500 | $9,500 | $5,900 |
| – Medium | $14,100 | $21,150 | $16,200 |
| – Large | $24,600 | $33,400 | $30,900 |
| Painter | |||
| – Small | $1,000 | $3,200 | $1,700 |
| – Medium | $3,900 | $5,850 | $4,700 |
| – Large | $7,400 | $12,300 | $9,000 |
| Landscaper | |||
| – Small | $1,056 | $2,206 | $1,400 |
| – Medium | $3,268 | $5,057 | $4,000 |
| – Large | $5,139 | $10,874 | $7,800 |
| Handyman | |||
| – Small | $1,700 | $3,600 | $2,800 |
| – Medium | $5,700 | $8,600 | $7,600 |
| – Large | $10,600 | $20,200 | $16,000 |
| Carpenter | |||
| – Small | $1,300 | $4,700 | $2,500 |
| – Medium | $4,100 | $10,200 | $7,100 |
| – Large | $8,800 | $22,700 | $15,500 |
| General Contractor | |||
| – Medium | $4,600 | $12,300 | $6,600 |
| – Large | $8,500 | $17,000 | $11,200 |
| – XL | $19,400 | $39,900 | $25,900 |
Here are some examples of common general liability premium ranges at certain revenue levels:
| Annual Revenue | Est. Premium Range |
|---|---|
| $500,000 | $5,000 – $20,000 |
| $1,500,000 | $15,000 – $60,000 |
| $5,000,000 | $50,000 – $200,000 |
The wide premium ranges are due to significant variables between contracting businesses that impact final rates. Here are key factors that influence general liability insurance costs for contractors in Maine:
– Type of Work – Certain contracting professions like roofing, plumbing, electrical, HVAC and exterior construction trades are seen as higher risk and have higher premiums. The more hazardous the work, the higher the liability insurance costs.
– Revenue Size – Insurers use a contractor’s annual revenue as a proxy for their overall business size and risk level. Larger revenue means greater exposure, which translates to higher premiums.
– Claims History – Contractors with past liability claims filed against them will see their premiums increased, especially if the claims were particularly large or frequent. Too many claims can even make securing insurance difficult. A clean claims history helps lower rates.
– Business Experience – New and younger contracting businesses are viewed as higher risk and will pay higher premiums until they establish a solid track record over a number of years. Highly experienced contractors tend to qualify for lower rates.
– Risk Transfer – Contractors who take steps to transfer or reduce risk, like requiring subcontractors to carry adequate general liability insurance and getting proof of coverage, usually pay lower premiums.
– Policy Limits – Carrying higher liability limits does provide more protection but also increases premiums substantially. Lower limits may expose the contractor to potentially uncovered losses from larger claims.
– Deductibles – Choosing a higher deductible, which is the amount the contractor pays out-of-pocket on a claim before insurance kicks in, can significantly reduce premiums. It increases risk for small claims.
– Insurance Company – The insurer’s financial strength, reputation for claims payments, and competitiveness within the Maine contractor insurance marketplace can impact pricing of premiums.
Workers Compensation Insurance
Workers’ compensation insurance covers employee injuries that happen on the job. Premiums can range widely for contractors depending on risk exposure factors. Maine ranks on the more affordable end nationally for workers’ comp costs.
| Low | High | Average | |
| Electrician | |||
| – Small | $992 | $2,170 | $1,240 |
| – Medium | $2,790 | $6,138 | $3,720 |
| – Large | $4,340 | $9,610 | $6,200 |
| Plumber | |||
| – Small | $2,307 | $5,047 | $2,884 |
| – Medium | $6,489 | $14,277 | $8,652 |
| – Large | $10,095 | $22,352 | $14,421 |
| Painter | |||
| – Small | $2,646 | $5,788 | $3,307 |
| – Medium | $7,441 | $16,371 | $9,922 |
| – Large | $11,575 | $25,631 | $16,536 |
| Landscaper | |||
| – Small | $1,512 | $3,308 | $1,890 |
| – Medium | $4,253 | $9,356 | $5,670 |
| – Large | $6,615 | $14,648 | $9,450 |
| Handyman | |||
| – Small | $3,351 | $7,331 | $4,189 |
| – Medium | $9,425 | $20,736 | $12,567 |
| – Large | $14,662 | $32,465 | $20,945 |
| Carpenter | |||
| – Small | $3,198 | $6,996 | $3,998 |
| – Medium | $8,995 | $19,790 | $11,994 |
| – Large | $13,993 | $30,984 | $19,990 |
| General Contractor | |||
| – Medium | $10,054 | $21,992 | $12,567 |
| – Large | $15,709 | $34,559 | $20,945 |
| – XL | $29,323 | $64,930 | $41,890 |
Typical workers’ compensation premiums for contractors may range from:
| Annual Payroll | Est. Premium Range |
|---|---|
| $500,000 | $5,000 – $22,000 |
| $2,500,000 | $25,000 – $100,000 |
| $10,000,000 | $100,000 – $400,000 |
The breadth of the ranges are due to significant variances in risk profiles between contracting businesses. Here are key factors that influence workers’ compensation insurance costs:
– Payroll Size – The total payroll and number of employees directly impact premium calculations. The greater the payroll exposure, the higher the workers’ comp premium.
– Job Classification – The type of work conducted by employees is classified into risk categories. Higher risk construction trades like roofing or electrical work have higher rates than lower risk office work.
– Experience Rating – Contractors are graded on their past loss history. Those with fewer or lower cost claims get an ‘experience credit’ applied to reduce premiums. Too many past claims lead to an ‘experience debit’ that increases premiums.
– Industry Trends – Rising loss trends across the construction industry as a whole will lead insurers to increase base rates, which affects all contractors regardless of individual loss history.
– Safety Record – Contractors with strong safety programs and low injury rates can qualify for discounted premiums by becoming ‘safety certified’. Poor safety leads to increased premiums.
– Premium Modifiers – Factors like employee experience, contractor longevity, and meeting loss control standards allow qualifying contractors to earn premium credits and debits that directly impact final rate.
– Deductible – Choosing a higher deductible, which is the amount the contractor pays out-of-pocket on a claim before insurance coverage kicks in, can significantly reduce premiums but increases risk.
– Insurer – The insurance company’s financial strength, reputation for claims handling, and overall stability impact the base rates charged and overall premium costs.
Additional Contractor Insurance Coverages
Beyond general liability and workers’ compensation, construction businesses in Maine often need supplemental insurance policies to ensure complete protection:
Commercial Automobile Insurance – Covers vehicles used for business purposes from liability claims. Typical auto premiums range from $750 – $3,000 per vehicle annually.
Inland Marine (Tools & Equipment – Protects tools, equipment and machinery on job sites and in transit. Premiums often range from $500 – $5,000 annually for $10,000 to $250,000 in coverage.
Surety Bonds – Required by law for public project bidding and execution. Typical premiums range from 1-5% of the total bond amount based on contractor qualifications.
Builder’s Risk – Insurers construction projects themselves while underway. Typical premiums range from 0.3% – 2% of the completed contract value.
Cyber Liability – Covers data breaches, hacking incidents, electronic theft and cyber extortion. Premiums often range from $500 – $5,000 annually.
Professional Liability (E&O – Protects against errors, omissions and professional negligence claims. Premiums range from 0.5% – 2% of annual revenue.
Umbrella Liability – Provides additional liability coverage above other underlying policy limits. Typical premiums range from $500 – $2,500+ per million in additional protection.
Contractor Insurance Savings with ContractorNerd.com
Are you a Maine contractor looking to protect your business with adequate, tailored insurance coverage? Partnering with ContractorNerd.com ensures you make smart insurance investments to safeguard your company’s future.
Here’s why over 10,000 contractors trust ContractorNerd.com for their insurance needs:
Industry Expertise – Our dedicated team specializes exclusively in contractor insurance. We live and breathe construction risk and insurance. No one understands better the unique exposures and coverage contractors need.
Tailored Solutions – We match our network of contractors with the specialized brokers and carriers that fit their coverage needs, risk profile and budget. One size does not fit all in contractor insurance.
Cost Savings – Our specialists are skilled at finding affordable tailored solutions from quality insurers. We help identify potential gaps in coverage as well as savings on premiums.
One-Stop-Shop – We handle the heavy lifting of securing bids across multiple insurance policies to find you optimal protection. No more calling brokers all over town or navigating confusing insurance applications.
Don’t leave your hard-earned business success unprotected. The insurance experts at ContractorNerd.com make it simple to properly safeguard your company. Get a free quote and experience the contractor insurance advantage!