For construction companies in Montana, 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 Montana 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 Montana 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.
Montana’s construction landscape requires thorough insurance coverage. A guide to liability insurance for general contractor businesses is essential for risk management. Navigating workers compensation for contractors protects your team from workplace injuries. Explore our resources on comprehensive insurances for contractors for more details.
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, electrical, and plumbing contractors tend to have some of the highest premiums.
– Years in business – Contractors who are new to the business often pay higher premiums until they establish a track record. Insurance companies view experience as an indicator of lower risk. New contractors are seen as unproven, leading to higher rates.
– Claims history – Prior claims made by a contractor will often result in increased premiums. Too many claims can make a contractor uninsurable. A clean claims history demonstrates lower risk and will help 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. Lower limits can save money but may expose you to uncovered losses.
– Number of employees – More employees on payroll increases the risk exposure for things like workers’ comp. Rates will be higher as a result. The total payroll amount also factors into premiums.
– Safety record – Contractors with poor safety records or OSHA violations can expect to pay higher premiums. Proactive safety reduces risk and demonstrates you operate safely.
– Business size – Larger contracting firms often get lower rates based on economies of scale and broader risk distribution. Smaller firms are seen as higher risk and pay more.
– Insurance provider – Rates can vary significantly between insurance companies. Competitive bidding is wise. Insurer financial strength also impacts costs.
The key is to maintain excellent records, safety practices, qualifications, experience, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premiums.
Small, Medium, Large Contractor Benchmarking in Montana
The key below displays our definition for small, medium and large contractors in Montana alongside typical insurance coverages. This helps provide you with a general benchmark to help you 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. Their expertise can help you find the optimal insurance program.
General Liability Insurance Costs in Montana
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 both legal defense costs and any covered lawsuit damages up to the policy limits.
| Low | High | Average | |
| Electrician | |||
| – Small | $900 | $2,500 | $1,800 |
| – Medium | $2,100 | $7,100 | $5,100 |
| – Large | $4,800 | $13,200 | $9,800 |
| Plumber | |||
| – Small | $5,400 | $11,100 | $8,000 |
| – Medium | $11,300 | $36,100 | $24,700 |
| – Large | $27,000 | $63,800 | $51,400 |
| Painter | |||
| – Small | $1,600 | $2,800 | $2,100 |
| – Medium | $3,700 | $6,700 | $5,600 |
| – Large | $7,500 | $13,300 | $10,800 |
| Landscaper | |||
| – Small | $1,267 | $2,217 | $1,600 |
| – Medium | $2,799 | $6,642 | $4,700 |
| – Large | $5,287 | $12,269 | $8,700 |
| Handyman | |||
| – Small | $1,700 | $4,200 | $3,200 |
| – Medium | $3,900 | $11,600 | $7,600 |
| – Large | $5,400 | $23,200 | $15,300 |
| Carpenter | |||
| – Small | $1,900 | $4,900 | $3,600 |
| – Medium | $6,500 | $13,600 | $10,300 |
| – Large | $14,500 | $31,100 | $22,000 |
| General Contractor | |||
| – Medium | $5,200 | $9,500 | $6,700 |
| – Large | $10,400 | $13,700 | $11,400 |
| – XL | $25,100 | $76,100 | $36,400 |
Typical premiums range from 1% to 5%+ of revenue for $1 million per occurrence limits. Here are some typical annual premium ranges for general liability insurance for contractors in Montana:
| Contractor Revenue | Typical Premium Range |
|---|---|
| $150,000 | $1,500 – $7,500 |
| $500,000 | $5,000 – $25,000 |
| $1 million | $10,000 – $50,000 |
For example, a contractor doing $500,000 in annual revenue may pay around $7,500 for a $1 million general liability policy with a $2,000 deductible.
Key factors that influence general liability insurance costs for Montana contractors:
– Type of work – Certain types of contracting work like roofing, plumbing, and electrical work are seen as higher risk by insurers and thus have higher insurance premiums. More hazardous work leads to higher liability insurance costs.
– Revenues – Contractors with higher annual revenues will generally pay more for liability coverage as they have greater exposure. Insurance companies use revenue as a proxy for a business’s size and risk level.
– Claims history – Contractors with past claims filed against them will see their premiums increased, especially if the claims were costly. Too many claims can make a contractor uninsurable. A clean claims history will help lower rates.
– Business experience – Newer contractors are viewed as higher risk and will pay more until they establish a track record. Contractors who have been in business for many years tend to get lower rates.
– Risk transfer – Insureds who take steps to transfer or reduce risk like requiring subcontractors to carry insurance, securing performance bonds, and requiring proof of insurance from subcontractors will pay lower premiums.
– Policy limits – Higher liability policy limits equal higher premiums. But lower limits may expose the contractor to uncovered losses from larger claims. Most carry $1M to $2M.
– Deductibles – Choosing a higher deductible, the amount the contractor pays on a claim before insurance kicks in, can significantly reduce premiums. Typical deductibles range from $500 to $5,000.
– Insurance company & competition – The insurer’s financial strength and loss payout reputation as well as the level of competition in the contractor insurance market can impact premium pricing.
Workers Compensation Insurance Costs in Montana
Workers’ compensation covers employee injuries and illnesses experienced on the job. For contractors, premiums can range significantly. Montana ranks among the more affordable states for workers’ comp.
| Low | High | Average | |
| Electrician | |||
| – Small | $1,486 | $3,251 | $1,858 |
| – Medium | $4,180 | $9,197 | $5,574 |
| – Large | $6,503 | $14,399 | $9,290 |
| Plumber | |||
| – Small | $2,349 | $5,139 | $2,937 |
| – Medium | $6,608 | $14,537 | $8,810 |
| – Large | $10,278 | $22,759 | $14,683 |
| Painter | |||
| – Small | $2,473 | $5,411 | $3,092 |
| – Medium | $6,956 | $15,304 | $9,275 |
| – Large | $10,821 | $23,961 | $15,459 |
| Landscaper | |||
| – Small | $1,520 | $3,325 | $1,900 |
| – Medium | $4,275 | $9,405 | $5,700 |
| – Large | $6,650 | $14,725 | $9,500 |
| Handyman | |||
| – Small | $3,148 | $6,887 | $3,935 |
| – Medium | $8,855 | $19,481 | $11,806 |
| – Large | $13,774 | $30,500 | $19,677 |
| Carpenter | |||
| – Small | $2,966 | $6,488 | $3,707 |
| – Medium | $8,342 | $18,352 | $11,122 |
| – Large | $12,976 | $28,732 | $18,537 |
| General Contractor | |||
| – Medium | $9,444 | $20,659 | $11,805 |
| – Large | $14,756 | $32,464 | $19,675 |
| – XL | $27,545 | $60,993 | $39,350 |
Here are some typical annual premium ranges for workers’ compensation insurance for contractors in Montana:
| Payroll | Typical Premium Range |
|---|---|
| $150,000 | $3,000 – $9,000 |
| $500,000 | $10,000 – $30,000 |
| $1 million | $20,000 – $60,000 |
For example, a contractor with a $500,000 payroll may pay $18,000 for a workers’ compensation policy with a $1,000 deductible.
Key factors that influence workers’ compensation insurance costs for Montana contractors:
– Payroll – The total payroll and number of employees are factored into workers’ comp premium calculations. Higher payroll equals higher premiums.
– Job classification – The type of work performed by employees is classified into risk categories. Higher risk work like roofing or electrical has higher premium rates than office work.
– Experience rating – Contractors are graded on their past loss history. Those with fewer or lower cost claims get an ‘experience credit’ reducing premiums. High claims lead to an ‘experience debit’ increasing premiums.
– Industry trends – Premium rates for the construction industry as a whole influence costs. Rates rise if industry-wide losses increase.
– Safety record – Contractors with strong safety programs and low injury rates can qualify for premium discounts for being ‘safety certified’. Poor safety leads to increased premiums.
– Subcontractor coverage – Contractors using uninsured subcontractors will pay higher premiums to cover those worker exposures. Requiring subs to carry their own workers’ comp lowers a contractor’s risk and costs.
– State laws – States have different laws around benefits, exclusions, rate-setting and premium discounts which influence workers’ comp costs. State rate mandates directly impact what contractors pay.
– Deductible – Like general liability, a higher deductible lowers workers’ comp premiums but increases the portion the contractor pays for each claim. Typical deductibles range from $500 to $2,500 per claim.
– Insurance company – The financial strength, service, and pricing of the insurance carrier influences overall costs. A stable insurer with fair rates lowers premiums.
Overview of Additional Insurance Coverages and Typical Premiums
Beyond general liability and workers’ compensation, Montana contractors require supplemental policies:
Commercial Auto Insurance
Covers vehicles used for business purposes. Protects against third party bodily injury and property damage claims. Typical premiums range from $1,000 – $3,000 per vehicle.
Inland Marine (Tools) Insurance
Protects tools and equipment onsite and in transit. Provides coverage for theft, damage, mysterious disappearance and more. Typical premiums range from $500 – $2,000 annually for $5,000 to $25,000 in limits.
Surety Bonds
Required for public works and many projects. Guarantees contract completion and payment of vendors. Typical premiums range from 1-3% of the bond amount based on business and personal credit.
Commercial Property Insurance
Safeguards offices, warehouses, showrooms and other business properties. Protects against perils like fire, water damage, theft and vandalism. Typical premiums range from $500 – $5,000 annually.
Business Owners Policy (BOP
Combines general liability, commercial property and other coverages into a convenient, cost-effective package for small contractors. Average costs range from $750 – $1,500 per year.
Employment Practices Liability
Defends against wrongful termination, discrimination, sexual harassment and other employee lawsuits. Typical premiums range from $1,500 – $5,000 annually.
Cyber Liability Insurance
Responds to data breaches, hacking, ransomware attacks and electronic theft. Covers costs of investigating, notifying customers and restoring data. Typical premiums range from $500 – $2,000 annually.
Commercial Umbrella Liability
Provides additional liability limits above other policies like general liability and auto coverage. Added peace of mind and protection. Typical premiums range from $750 – $1,500 annually per $1 million in additional coverage.
Builders Risk Insurance
Covers construction projects and renovations while in progress. Protects against property damage from accidents, storms, theft and vandalism. Average costs range from 0.5% to 3% of total project values.
E&O – Errors & Omissions Insurance
Protects against financial loss from professional services and damage to clients. Important for design-build contractors and subcontractor services. Average costs range from $1,000 – $4,000 annually.
Montana 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 is exclusively focused on contractor insurance, ensuring that they have a deep understanding of your industry and its intricacies. We know the challenges you face, and we’re here to help you navigate them.
2. Access to Top Markets Over the years, we have cultivated strong partnerships with the leading insurance providers. This means that when you choose ContractorNerd.com, you gain access to a wide network of trusted insurers. Our connections allow us to swiftly secure multiple quotes tailored to your unique requirements.
3. Cost-Effective Solutions: We understand the importance of cost-effective coverage for your business. Our specialists not only help you find the right insurance but also advise on potential gaps and cost-saving opportunities. This way, you can optimize your protection without breaking the bank.
4. Trusted Advisors: We aim to build long-term relationships and serve as trusted advisors guiding you through changes in your business. Our goal is to provide you with specialized expertise, education and excellent service for the long run.
5. Quotes in Minutes: Our streamlined quote process makes getting covered faster than ever. In as little as five minutes, you can receive customized insurance quotes for your contractor business in Montana. No paperwork or hassles.
Conclusion
Your contractor business is your livelihood, and protecting it is paramount. At ContractorNerd.com, we are committed to safeguarding your company the right way. Don’t settle for generic insurance solutions or spend endless hours gathering quotes from multiple brokers. Choose the dedicated experts at ContractorNerd.com to secure the future of your contractor business. Get a quote today and take the first step towards comprehensive and cost-effective protection.