For construction companies in Missouri, 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 comprehensive guide will uncover typical insurance costs for Missouri contractors across popular policies like general liability, workers’ compensation, bonds, equipment coverage, and more. We’ll explore the key variables impacting your premiums, provide detailed benchmarking data for small, medium and large contractors, and suggest strategies to secure the most favorable rates possible.
Understanding typical contractor insurance expenses in Missouri allows you to accurately 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 that protect your company without overspending.
Missouri contractors need robust insurance solutions. A look at general liability insurance contractor policies is crucial for business protection. Workers’ compensation coverage for contractors safeguards your workforce. Our guide on finding cheap contractor insurance offers comprehensive coverage information.
Key Factors Influencing Insurance Costs for Contractors
Many variables influence the cost of insurance for contractors. Being aware of these factors allows you to minimize premiums through effective risk management. Here are some of the key factors that can impact insurance costs:
Type of Work – The type of contracting work being performed (construction, plumbing, electrical, HVAC, etc.) greatly impacts your risk profile and therefore the base insurance rates. Higher risk work such as roofing, demolition, and marine construction typically have much higher insurance premiums than lower risk general building contractors.
Years in Business – Contractors who are new to the business usually pay higher premiums until they establish a solid track record over several years. Insurance companies view extensive experience as an indicator of lower claims risk. Newer contractors are charged risk premiums.
Claims History – Prior claims made against a contractor will often result in significantly increased premiums, especially if the claims were large or frequent. Too many claims can even make an otherwise healthy contractor uninsurable. Maintaining a clean claims history helps lower insurance rates.
Coverage Limits – Higher levels of coverage for policies like general liability, builders risk, or workers’ compensation mean higher premiums. Contractors must strike the right balance between cost and the level of protection needed for their scale of operations.
Number of Employees – Having more employees on payroll increases the overall risk exposure for workers’ compensation claims, workplace injuries, etc. More employees equals greater exposure, so rates climb higher as a result.
Safety Record – Contractors with poor safety records or OSHA violations can expect to pay substantially higher premiums. Conversely, those with excellent safety programs and low EMR ratings can qualify for significant discounts. Proactive safety pays dividends.
Revenue Size – In general, larger contracting firms get better insurance rates based on their economies of scale and ability to spread risk over more work and employees. Larger firms have much greater bargaining power. Small contractors pay more.
Insurance Provider – Rates, coverage, and service can vary widely between insurance companies. This is why shopping around and competitive bidding is so important to find a top value insurer for your needs.
Deductibles – Choosing higher deductibles reduces premiums but increases your out-of-pocket costs on claims. The right deductible levels help balance premium savings against unexpected claim costs.
Risk Transfer – Smart risk transfer to others through hold harmless agreements, insurance requirements for subcontractors, waivers of subrogation, and similar legal instruments can substantially lower your premiums.
The key is to maintain excellent records, safety practices, qualifications, and choose appropriate coverages to help minimize insurance costs. Controlling risk is what lowers premiums. Now let’s explore detailed benchmarking data.
Small, Medium, Large Contractor Benchmarking in Missouri
The table below displays our definitions for small, medium and large contractors in Missouri alongside typical insurance coverages secured. This benchmarking data helps provide you with a general baseline understanding of how your insurance costs likely 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 risk attributes like location, services, safety record, number of employees and vehicles, payroll size, and revenue. Contractors who secure tailored coverage with quality carriers and favorable terms can sometimes achieve rates below the averages and toward the lower end of the ranges we provide.
If you need help assessing your specific insurance program, we encourage you to have an experienced specialist review it. The independent brokers in our network can analyze your existing contractor insurance policies and advise on potential gaps or cost-savings specific to your business.
Detailed General Liability Benchmarking
General liability, also known as CGL, protects your business if a third party alleges property damage or bodily injury caused by your construction operations. It covers both legal defense costs and settlements/judgments. Here are typical annual premium ranges:
| Low | High | Average | |
| Electrician | |||
| – Small | $1,000 | $2,300 | $1,600 |
| – Medium | $3,400 | $7,700 | $4,600 |
| – Large | $6,300 | $14,400 | $8,700 |
| Plumber | |||
| – Small | $3,700 | $7,200 | $5,400 |
| – Medium | $6,600 | $18,300 | $14,200 |
| – Large | $14,500 | $36,600 | $27,700 |
| Painter | |||
| – Small | $1,100 | $3,000 | $1,600 |
| – Medium | $2,400 | $5,800 | $4,400 |
| – Large | $3,700 | $11,700 | $8,200 |
| Landscaper | |||
| – Small | $974 | $1,844 | $1,300 |
| – Medium | $2,804 | $6,366 | $3,700 |
| – Large | $4,730 | $11,744 | $7,300 |
| Handyman | |||
| – Small | $2,300 | $4,025 | $2,700 |
| – Medium | $6,500 | $9,750 | $7,400 |
| – Large | $8,700 | $18,700 | $15,000 |
| Carpenter | |||
| – Small | $2,000 | $3,500 | $2,700 |
| – Medium | $3,500 | $9,200 | $7,500 |
| – Large | $7,000 | $20,300 | $15,300 |
| General Contractor | |||
| – Medium | $3,900 | $5,850 | $4,900 |
| – Large | $7,100 | $10,600 | $9,400 |
| – XL | $17,000 | $25,700 | $21,700 |
Small Contractors
| Revenue | Premium Range |
|---|---|
| $150,000 | $1,500 – $7,500 |
Medium Contractors
| Revenue | Premium Range |
|---|---|
| $300,000 | $3,000 – $15,000 |
| $500,000 | $5,000 – $25,000 |
Large Contractors
| Revenue | Premium Range |
|---|---|
| $750,000 | $7,500 – $37,500 |
| $1M | $10,000 – $50,000 |
XL Contractors
| Revenue | Premium Range |
|---|---|
| $1.5M | $15,000 – $75,000 |
| $2.5M | $25,000 – $125,000 |
Many factors influence general liability insurance costs for Missouri contractors:
– Type of Work – Certain contracting trades like roofing, plumbing, electrical, and demolition are seen as higher risk and have higher base rates. Hazardous work leads to higher liability premiums.
– Revenues – Higher annual revenues equal greater risk exposure so premiums climb accordingly. Insurers use revenue as an indicator of a business’s size and claims likelihood.
– Claims History – Past claims drive up premiums, especially if frequent or severe. Too many claims can make coverage unavailable. A clean history helps lower rates.
– Experience – Newer contractors are viewed as riskier and charged higher premiums until they build experience over time. Established firms get better rates.
– Policy Limits – Higher liability limits mean higher premiums. Lower limits may be inadequate for large claims. Match limits to your risk.
– Deductibles – Choosing a higher deductible reduces premiums but increases your potential out-of-pocket costs if a claim occurs.
– Risk Transfer – Smart legal risk transfer to others (i.e. subcontractors) reduces your liability exposure and lowers premiums.
– Insurance Company – The insurer’s financial strength, reputation, and marketplace competition influence pricing.
Detailed Workers Compensation Benchmarking
Workers’ compensation insurance covers medical expenses and lost wages for employees injured on the job. Premiums vary significantly based on risk classification, claims history, discount eligibility, and other factors. Here are typical annual premium ranges:
| Low | High | Average | |
| Electrician | |||
| – Small | $1,280 | $2,800 | $1,600 |
| – Medium | $3,600 | $7,921 | $4,800 |
| – Large | $5,600 | $12,401 | $8,001 |
| Plumber | |||
| – Small | $2,529 | $5,533 | $3,162 |
| – Medium | $7,114 | $15,650 | $9,485 |
| – Large | $11,066 | $24,503 | $15,808 |
| Painter | |||
| – Small | $2,430 | $5,316 | $3,038 |
| – Medium | $6,834 | $15,036 | $9,113 |
| – Large | $10,631 | $23,541 | $15,188 |
| Landscaper | |||
| – Small | $1,616 | $3,535 | $2,020 |
| – Medium | $4,545 | $9,999 | $6,060 |
| – Large | $7,070 | $15,655 | $10,100 |
| Handyman | |||
| – Small | $4,631 | $10,130 | $5,788 |
| – Medium | $13,024 | $28,652 | $17,365 |
| – Large | $20,259 | $44,860 | $28,942 |
| Carpenter | |||
| – Small | $3,379 | $7,392 | $4,224 |
| – Medium | $9,504 | $20,909 | $12,672 |
| – Large | $14,784 | $32,736 | $21,120 |
| General Contractor | |||
| – Medium | $13,891 | $30,387 | $17,364 |
| – Large | $21,705 | $47,751 | $28,940 |
| – XL | $40,516 | $89,714 | $57,880 |
Small Contractors
| Payroll | Premium Range |
|---|---|
| $50,000 | $2,000 – $7,500 |
Medium Contractors
| Payroll | Premium Range |
|---|---|
| $150,000 | $6,000 – $22,500 |
| $250,000 | $10,000 – $40,000 |
Large Contractors
| Payroll | Premium Range |
|---|---|
| $500,000 | $20,000 – $80,000 |
| $750,000 | $30,000 – $120,000 |
XL Contractors
| Payroll | Premium Range |
|---|---|
| $1M | $40,000 – $160,000 |
| $1.5M | $60,000 – $240,000 |
Many variables influence workers’ compensation premiums:
– Payroll Size – Total payroll and number of employees factor into premium calculations. More payroll equals higher premiums.
– Risk Classification – Type of work performed is classified by risk level. High risk work gets rated higher.
– Experience Mod – Firms are graded on loss history. More/costly claims lead to higher premiums.
– Industry Trends – If industry-wide loss trends rise, rates increase as well.
– Safety Record – Good safety can qualify for premium credits. Poor safety leads to hikes.
– Subcontractors – Using uninsured subs raises your premiums significantly.
– State Laws – State rules/rates impact premiums e.g. benefit levels, claim statutes, etc.
– Deductible – Higher deductibles reduce premiums but increase out-of-pocket costs.
– Insurer – Premiums and services vary between insurance companies.
Smart risk management and selecting the right insurer can help control workers’ compensation costs. Now let’s look at other key coverages.
Additional Insurance Coverages and Typical Premiums
Beyond general liability and workers’ compensation, contractors require several other policies:
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, driver safety records, liability limit needs, etc.
Commercial Property Insurance – Protects your business properties like offices, warehouses, equipment yards etc. Typical premiums range widely from $2,000 up to $50,000 per year or more based on property values, locations, and amount of equipment.
Inland Marine Insurance – Covers contractors tools, equipment and machinery that is constantly moving or temporarily located at project sites. Premiums range from $1,500 up to $25,000+ depending on the scale of equipment insured.
Surety Bonds – Required bid, performance and payment bonds for public projects. Typical rates range from 1% – 5% of the bond amount required, based on personal and business credit factors.
Business Interruption Insurance – Covers income lost due to covered property damage losses. Premiums vary based on business size and coverage limits.
Cyber Liability Insurance – Protects against data breaches, hacking losses, and electronic theft. Typical premiums range from $500 up to $5,000 annually depending on revenue.
Employment Practices Liability – Defends against wrongful termination, harassment, discrimination and other employment lawsuits. Typical premiums range from $2,500 to $20,000 annually depending on workforce size and coverage limits.
Pollution Liability – Covers third-party damages from pollution incidents. Premiums vary sharply based on environmental risks.
Umbrella Liability – Provides additional liability coverage above other policies. Typical premiums range from $1,000 to $15,000+ annually per $1 million in additional coverage.
Contractors should regularly review all exposures with their insurance agent or broker to ensure adequate, cost-effective insurance protection. Now let’s look at how to maximize insurance savings.
Strategies to Reduce Contractor Insurance Costs
Here are some key strategies Missouri contractors can employ to lower their insurance premiums:
– Shop around between insurers when policies are up for renewal to compare rates. Watch for shifts in the market.
– Ask your insurance broker to benchmark your current rates against other contractors to identify savings opportunities.
– Maintain proper classifications and experience mods to achieve the most favorable base premium rates possible.
– Keep excellent records and safety protocols to earn discounts and minimize loss exposures.
– Reduce policy loss runs by effectively managing any claims that do arise.
– Raise liability deductibles prudently to lower premiums, but avoid unaffordable out-of-pocket costs.
– Bundle multiple policies with the same insurer to maximize discounts for account size. But avoid placing all eggs in one basket.
– Leverage risk transfer techniques aggressively in contracts to shift exposures to subcontractors, architects, owners, etc.
– Require subcontractors to maintain adequate insurance and name you as an additional insured.
– Reassess policy limits, sub-limits and exclusions regularly to right-size coverage as your business changes over time.
– Work with an independent insurance broker who can provide unbiased advice and source the best coverage options across a number of insurers.
The right insurance advisor can be invaluable in structuring an optimal contractor insurance program tailored to your unique risk profile, while maximizing savings.
Partnering with ContractorNerd.com
Are you looking to secure the future of your Missouri contracting business? ContractorNerd.com can help. We specialize in contractor insurance and understand the types of risks you face in this industry. Our dedicated advisors partner with you to:
– Analyze your exposures and current insurance policies
– Identify potential coverage gaps or excess costs
– Source tailored coverage options from top-rated regional and national insurance carriers
– Benchmark your pricing to find opportunities for savings
– Provide unbiased, data-driven advice to optimize your insurance
ContractorNerd.com will match you with an advisor who focuses 100% on contractor insurance. Backed by years of experience, our advisors provide strategic, proactive support to protect your company the right way at a competitive cost.
Contact us today to discuss your insurance needs at no obligation. We are committed to becoming a trusted long-term partner who has your back.
Conclusion
Insurance is critical to protect your hard-earned construction business. But securing the right coverage at reasonable cost can be challenging without the proper guidance. Use the benchmarking data in this guide as a reference point when evaluating policies and pricing for Missouri contractors. For an in-depth analysis of your specific insurance needs and savings opportunities, contact the experts at ContractorNerd.com. Our dedicated advisors can provide the strategic insurance counsel required to help safeguard the future of your contracting business.