For construction companies in North Carolina, having adequate insurance is essential to protect your business. As a contractor, you face diverse risks ranging from property damage and employee injuries to lawsuits and cyber attacks. Purchasing cost-effective insurance tailored to your operations can safeguard your assets and future. 

This guide will uncover typical insurance costs for North Carolina 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 North Carolina 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.

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

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 premiums. Roofing, plumbing, electrical, and other hazardous trades tend to have the highest liability and workers’ comp costs. More office-based contractors like surveyors may have lower rates.

Years in business – Contractors who are new to the business often pay higher premiums until they establish a track record over 3-5 years typically. Insurance companies view experience as an indicator of lower risk. Newer contractors are seen as riskier.

Claims history – Prior claims made by a contractor will often result in increased premiums. Too many claims or large losses can make a contractor uninsurable altogether. A clean claims history 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 for their business. Lower limits can reduce costs but also expose contractors to uncovered losses should a large claim occur. There are no set recommended limits. The optimal amount depends on business size and risk tolerance. 

Number of employees – More employees on payroll increases the risk exposure for things like workers’ comp. Rates will be higher as a result. The type of work the employees engage in also affects premiums based on risk. Office staff have lower associated risks than trade workers. 

Safety record – Contractors with poor safety records or OSHA violations can expect to pay higher premiums. Proactive safety reduces risk. Strong safety programs and proper safety certification lowers insurance costs.

Business size – Larger contracting firms often get lower rates based on economies of scale and broader risk distribution. Smaller firms with lower revenues pay more as they represent a smaller premium pool for insurers. 

Insurance provider – Rates can vary significantly between insurance companies. Competitive bidding is wise. Insurers have different risk appetites, pricing models and specialty programs. A broker can help find the right carrier.

The key is to maintain excellent records, safety practices, qualifications, experience, and choose appropriate coverages to help minimize insurance costs. Controlling risk lowers premiums. Now let’s explore benchmarks.

Small, Medium, Large Contractor Benchmarking in North Carolina

The key below displays our definition for small, medium and large contractors in North Carolina alongside typical insurance coverages secured. This helps provide you with a general benchmark to understand how your costs compare.

CriteriaSmall ContractorMedium ContractorLarge ContractorXL Contractor
Revenue$150K$500K$1M$2.5M
Employees13510
Autos1235
Worth of Tools$5K$10K$25K$50K
General LiabilityYesYesYesYes
Workers’ CompYesYesYesYes
Commercial AutoYesYesYesYes
Inland MarineYesYesYesYes
UmbrellaNoNoYesYes
North Carolina Average Total Insurance Premium

Typical Insurance Coverages:

– General Liability 

– Workers’ Comp

– Commercial Auto

– Inland Marine

– Umbrella

XL Contractor:

– $2.5M Revenue  

– 10 Employees

– 5 Autos

– $50K worth of Tools

Typical Insurance Coverages:

– General Liability

– Workers’ Comp 

– Commercial Auto

– Inland Marine

– Umbrella

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. 

General Liability Insurance Costs in North Carolina

North Carolina 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 fees, medical payments, settlements and judgements up to the policy limits.

LowHighAverage
Electrician
– Small$600$1,500$1,100
– Medium$1,200$4,800$2,800
– Large$2,400$10,200$5,600
Plumber
– Small$4,000$8,700$6,600
– Medium$12,700$24,000$16,800
– Large$25,200$40,400$30,900
Painter
– Small$700$3,000$1,400
– Medium$1,400$5,800$3,500
– Large$2,900$12,200$7,000
Landscaper
– Small$640$2,522$1,200
– Medium$1,074$4,599$2,900
– Large$2,138$9,345$5,900
Handyman
– Small$1,000$3,400$2,200
– Medium$3,200$8,300$5,800
– Large$6,700$19,400$12,100
Carpenter
– Small$1,100$4,800$2,300
– Medium$2,700$10,500$6,200
– Large$5,900$23,500$13,500
General Contractor
– Medium$2,500$12,300$5,200
– Large$4,700$17,600$8,500
– XL$12,500$41,300$23,600

Typical policy limits for small contractors are $1 million per occurrence and $2 million aggregate. Medium-large contractors often secure $2 million per occurrence and $4 million aggregate limits or higher.

Premiums are calculated as a rate applied to a measure of the contractor’s size – typically revenue. Rates range from 2.5% to 15% of revenue. Typical premiums range from 1% to 5% of revenue for $1 million per occurrence limits.

Here are typical annual premium ranges based on contractor size:

Contractor RevenueEst. Premium Range
$150,000$1,500 – $7,500
$500,000$5,000 – $25,000
$1 million$10,000 – $50,000
$2.5 million$25,000 – $125,000

As shown above, general liability premiums for small contractors in North Carolina may range from $1,500 to $7,500+ per year, while medium-sized contractors can expect to pay between $5,000 to $25,000 typically. Large contractors with $1M+ in revenue may see annual premiums between $10,000 to $50,000 or more.

Key factors that influence general liability insurance costs for North Carolina 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 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 – Insured’s 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.

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

Insurance company – The insurer’s financial strength, reputation, experience in the contractor market and level of competition in the state influences premium pricing.

Workers Compensation Insurance Costs in North Carolina

North Carolina Average Premiums for Workers Compensation

Workers’ compensation covers employee injuries and illnesses experienced on the job. Premiums can range significantly in North Carolina based on risk factors. 

LowHighAverage
Electrician
– Small$1,122$2,455$1,403
– Medium$3,156$6,943$4,208
– Large$4,909$10,870$7,013
Plumber
– Small$1,383$3,025$1,729
– Medium$3,889$8,556$5,186
– Large$6,050$13,396$8,643
Painter
– Small$1,950$4,266$2,438
– Medium$5,485$12,067$7,313
– Large$8,532$18,893$12,189
Landscaper
– Small$1,080$2,363$1,350
– Medium$3,038$6,683$4,050
– Large$4,725$10,463$6,750
Handyman
– Small$5,298$11,588$6,622
– Medium$14,899$32,778$19,866
– Large$23,177$51,320$33,110
Carpenter
– Small$3,776$8,261$4,720
– Medium$10,621$23,366$14,161
– Large$16,521$36,582$23,602
General Contractor
– Medium$15,893$34,766$19,866
– Large$24,833$54,632$33,110
– XL$46,354$102,641$66,220

Premiums are calculated based on a rate applied to payroll for each job classification such as roofer, plumber, electrician, clerical, executive, etc. Rates range from less than 1% to over 15% of payroll depending on the risk and job type.

Here are typical annual premium ranges based on payroll:

PayrollEst. Premium Range
$50,000$2,000 – $10,000
$250,000$7,500 – $50,000
$500,000$10,000 – $100,000
$1 million$25,000 – $200,000

A small contractor with $50,000 in payroll may see workers’ comp premiums between $2,000 to $10,000 typically. Medium contractors with $250,000 in payroll could expect to pay $7,500 to $50,000+ per year. Large contractors with over $500,000 in payroll might see premiums ranging from $10,000 to $100,000 annually.

Key factors that influence workers’ compensation insurance costs for North Carolina 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.

Policy deductible – Like general liability, a higher deductible lowers workers’ comp premiums but increases the portion the contractor pays for each 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, most North Carolina contractors require several supplemental policies:

Commercial Auto Insurance

Covers vehicles used for business purposes like trucks, vans and trailers. Provides liability and physical damage coverage. Typical premiums range from $1,500 – $4,000 per vehicle. Limits often $1 million liability/$1 million uninsured motorist.

Inland Marine (Tools) Insurance 

Also called contractors equipment insurance. Protects tools and equipment onsite and in transit. Provides coverage for theft, damage, vandalism. Typical limits $10K to $100K. Premiums range from $500 to $3,000+ depending on limit and risk. Deductible often $500 or $1,000.

Surety Bonds 

Required for public works and many large projects. Bid bonds, performance bonds, payment bonds. Credit score determines rates. Premiums range from 1-3% of the bond amount. Stronger credit means lower rates. Poor credit scores may make bonding impossible.

Commercial Property Insurance

Safeguards business properties like offices, warehouses, storage sheds from events including fire, water damage, hail, theft. Typical premiums $1,000 to $10,000+ based on location, building value, and coverage limit. Deductible often $1,000.

Employment Practices Liability 

Covers defense costs for employment lawsuits alleging discrimination, wrongful termination, harassment etc. Typical limits $100K to $500K. Premiums range from $1,000/year up to $5,000/year+ depending on limits, firm size, and state. Deductible often $5,000 – $10,000.

Cyber Liability Insurance

Responds to data breaches, hacking, electronic theft and cyber crime. Provides privacy liability, system damage, cyber extortion coverage. Typical limits $500K to $1M. Premiums range from $500 to $2,500+ per year. Deductible often $5,000 – $10,000..

Umbrella Liability Insurance

Extra liability limits above general liability, auto, employer’s liability. Typical additional limits $1M to $5M+ per occurrence and aggregate. Rates range from about $500 to $2,000 per $1M. Product available on admitted or non-admitted basis.

Professional Liability

Covers design flaws and negligence for trades like architectural, engineering, and surveyor contractors. Limits often $1M/$2M or more. Premiums vary based on firm size and revenue. Rates from 2% to 10%+ of revenue. Deductible often $5,000 or $10,000.

Builder’s Risk 

Covers new construction projects for all-risks including theft, vandalism, wind, fire. Limits equal project value. Premiums vary based on project size, type, location. Rates from as low as 0.75% to over 5% of completed value. Deductible often $1,000-$10,000.

North Carolina 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.

Don’t leave your business exposed to unforeseen risks. Partnering with ContractorNerd.com ensures that you’re making a smart investment in your business’s future. Get a quote today and take the first step towards comprehensive and cost-effective protection.